Elderling Creations Theory (Spoilers through all the books and Dragon Haven)

['thul]

All indications are that those villages are a fable. Fables do often tend to contain some grains of truth, though. The Witted once lived openly in their own villages, free from persecution. (the piebald prince changed that)


As for the connections between Elderlings and the Wit...

‘Thus every magic has its space in the spectrum of magic, and together they make up the great circle of power. All magical lore is encompassed in the circle, from the skills of the humble hedge-wizard with his charms, the scryer with his bowl or crystal, the bestial magic of the Wit and the celestial magic of the Skill, and all the homely magics of hearth and heart. All can be placed as I have shown them, in a great spectrum, and it must be clear to any eye that a common thread runs through all of them. But that is not to say that any user can or should attempt to master the full circle of magic. Such a wide sweep of the art is not given to any mortal, and with good reason. No one is meant to be master of all powers. A Skill-user may expand his expertise to scrying, and there have been tales of beast-magickers who had mastered some of the fire- magic- and water-finding skills of the hedgewizards. As illustrated by the chart, each of these lesser arcs of magic are adjacent to the greater magics, and thus a mage can expand his powers to include these minor skills as well. But to have larger ambitions than these is a great error. For one who augurs through a crystal to attempt to master the bringing of fire is a mistake. These magics are not neighbouring magics, and the strains of supporting their differences may bring discord to his mind. For a Skill user to demean himself with the beast-magic of the Wit is to invite the decay and debasement of his higher magic. Such a vile ambition should be condemned.’

This is a quote from Tawny man 2, describing the circle of magic...

The forms of magic described here are:
hedge wizardry - Charms, fire-making, water-finding
scrying - bowls, crystals
Wit - animal bonds, repelling, attracting, sensing emotions, activating stone dragons
Skill - thought transfer, changing things by touch, crafting music, reading minds, etc.
Homely magics of Hearth and heart - [not sure about which forms this involves]

An Elderling bond with a dragon is much like a wit bond, only on a higher level. Skill bonds are not as intense as a wit bond is, let alone as intense as a combined skill/wit bond. As can be recalled from when Verity skill-bonded with Fitz, such bond has to be set up "manually", often through direct contact. A witted does not need to touch the being it speaks to. (Thymara could hear dragonspeech without ever touching a dragon, as could Alise.)
Elderlings (even half-formed ones) have shown to also use the skill, and Malta used hedge-wizardry to create her hovering balls of fire to light the way. That alone puts three of the 5 listed aspects in Elderling reach.
Since there is nothing said about the fifth category, it is impossible to say what it involves, though it is likely it too is in use by Elderlings. Aside from the odd mentions in skill scrolls and chade's blind stumbling attempts at it, nothing is said about scrying. However, it is quite possible this is not so much seeing the future (no evidence of this in RotE), as it is seeing things far away. This would be close to the dream walking like nettle does and visions Tintaglia gave Reyn/Malta of each other, as well as close to those rain wild dream boxes. It is also somewhat familiar in that Farseer name.

Those bits of evidence above would connect Elderlings rather a lot to the whole circle of magic.

a small side point:

But that is not to say that any user can or should attempt to master the full circle of magic. Such a wide sweep of the art is not given to any mortal, and with good reason. No one is meant to be master of all powers.

Elderlings were known to live for centuries, and to a human whose life probably would not go much beyond 60, meeting a mature Elderling (say, in its 20's) when similarly aged, then meeting it 40 years later, at the end of the human life, the Elderling (whose life is barely begun) would not have changed age-wise. It is then easy to think Elderlings immortal. Especially if you combine it with the full power of the Elderling grasp of magical arts.
Then you have a link to how Elderlings can grasp all magic, where humans cannot.