There are three distinct Races at your disposal in Cursed Treasure 2: Orcs, Undead, and Demons. Although the actual distinctions are mostly flavor text, each race specializes in a certain aspect of your defenses, having a specific tower, spell, and skill tree associated with them.
Orcs are associated with Den-type towers, Grass tiles, poison, and the Cut Out spell. Their towers and skills tend to focus on inflicting as much damage as possible with their attacks, but they also have some emphasis on collecting gold.
The Undead are associated with Crypt-type towers, Snow tiles, lightning/ice, and the Terror spell. They emphasize inflicting status effects on enemies, such as Freeze, Fear, and even Instant Death. They also have a number of skills that improve your mana.
Demons are associated with Temple-type towers, Rock tiles, fire, and the Meteor spell. Their overarching strategy tends towards hitting multiple enemies at a time and helping towers gain experience more quickly. They also have some unique skills that directly benefit the player by boosting the experience they gain from missions and helping retrieve gems that are removed from the caves.