The fantastical world of Disenchantment is overflowing with magic and wonder. One of the key species in the show is the Elves, and while their mailing address has changed a few times throughout the series, they've stayed reminiscent of the Underpants Gnomes that tormented Tweek in South Park.
When viewers first met the Elves that lived in the Enchanted Forest near Dreamland, they were living peaceful lives in their hidden kingdom of Elfwood, spending all their time making candy and singing. There was very little conflict to deal with in Elfwood, mostly due to the fact that every day was consumed with candy. To some, it seemed like an ideal lifestyle, but that wasn't the case for Elfo.
In Episode 1, Elfo left Elfwood behind, encountered a war between the Gnomes and Ogres and met Bean. After that point, he began an incredible series of adventures that carried him all over the mystical lands around Dreamland. But before departing Elfwood, Elfo pointed out some things about his home, including raising some key questions about their economy.
The Elves work all day in Elfwood making candy. They are then paid in candy which they use to buy candy, which, of course, is their main form of sustenance. From there, the cycle repeats itself. So, when Elfo finally took a step back and really looked at the situation, he realized how pointless it all was. He was unsatisfied with this system, and his arbitrary place in it.
On South Park, the caffeine-addicted Tweek used to have a problem with the Underpants Gnomes, tiny creatures that would break into his room and stealing his underpants. Presumably, they were doing this to everyone in town, but because Tweek was constantly jacked on caffeine, he was always awake in the middle of the night when they showed up. As such, Tweek was the only one aware of what these creatures were up to.
The Underpants Gnomes stole underpants to make a profit, though they had no idea how to translate their immense supply of stolen garments into money. This ended up being a gaping hole in their overall business plan, and they didn't appreciate having that pointed out to them. In that way, the Elves and the Underpants Gnomes were incredibly similar.
When Elfo pointed out the inconsistencies in the Elves' candy based economy, they didn't take it very well. Similarly, the Underpants Gnomes were quite angry that Stan and the boys pointed out the literal question mark in the middle of their business plan. But in defense of the Underpants Gnomes, Cartman kept hitting them with rolled-up papers -- something that would make anyone angry.
In truth, neither group had an economic structure that made much sense. The Elves' candy system was circular and only worked while they were sequestered in Elfwood. The Underpants Gnomes, on the other hand, were even more absurd, stealing underpants without knowing how to use them to make money. Ultimately, it would've been beneficial for both groups if they had a well-thought-out strategy for operating their societies.