The Vanaras are the race of monkey-men who live in the southern regions, in the Dandaka Jungle. They are particularly famous in Indian Mythology thanks to Hanuman, the god who was also a member of the Vanara race and is one of the great heroes of the epic Ramayana.
The Vanara are an ancient civilization, long past their prime. They were never as advanced as human civilizations came to be, but were already civilized when humans were still barbaric. For much of their history, they were engaged in struggles with the mighty Asura Kings who rule in the south, and at the time of the Avatar Rama, the Vanara were under serious threat from Rama's enemy, the Asura King Ravana, lord of the mighty Asura empire of Lanka. Hanuman and Rama became staunch allies in defeating Ravana and destroying his empire.
After that time, over the last several thousand years, the Vanara have become more retiring, interacting less with humans. In those few human city-states south of the Riksha and Vindya hills/mountains Vanara are still found with some frequency, but in the north they are of sufficient rarity as to attract attention (if they wish to, of course, because a Vanara stripped of his clothing or equipment can very easily pass for a regular monkey; and Vanara wear clothing as decoration rather than out of modesty).
In terms of game-design for Arrows of Indra, I had to include Vanara for emulative reasons; in fact, the Vanara were the very first PC race I was absolutely certain I would be including in addition to humans. I think that most westerners with only the slightest notion of Indian myths would, if pressed to think of a non-human race that can be found in Indian myth, mention the "monkey-men". They're a very strong part of eastern mythology in general (with similar though disparate myths found in China and southeast Asia), and really that's not surprising: anywhere that monkeys were common one couldn't help but see these closest relatives of our species and think of them as taking on anthropomorphic qualities.
You could say they take up the niche of halflings, but this would be somewhat of an over-simplification: there's no doubt they're great tricksters, and sneaky, almost in ways more kender-like than the standard Tolkien-hobbit; but at the same time in the mythology its made clear they're great warriors too.
There's also a consideration in terms of Alignment niches: Rakshasas are the "unholy" non-human, Gandharvas and Yakshas are both "holy", so the Vanara satisfies the "neutral" niche.
From a personal perspective, I'd recommend GMs to be careful to advise players to walk a line with their Vanara PCs somewhere between "funny" and "stupid". Certainly, a Vanara can have its silly qualities, but there's a reason why so many gamers these days despise Kender, and a GM should curb any temptation to end up playing Vanaras as just stupid jokers; their depictions in the sources is as very clever, in fact. And even if you don't mind that kind of humor in your games, keep in mind that (in my experience) if you play a character into that corner of just being purely ridiculous, you will find it boring after just a few sessions.
Plus, its just a waste. There's so many dimensions of what you can play with a Vanara, don't limit them into the corner of being the group clown 100% of the time.
(october 16, 2013)