A dwarf galaxy is a small galaxy composed of up to several billion stars, a small number compared to our own Milky Way Galaxy's 200–400 billion stars. The Large Magellanic Cloud, which closely orbits the Milky Way and contains over 30 billion stars, is sometimes classified as a dwarf galaxy; others consider it a full-fledged galaxy. Dwarf galaxies' formation and activity are thought to be heavily influenced by interactions with larger galaxies. Astronomers identify numerous types of dwarf galaxies, based on their shapes and compositions.
Formation of dwarf galaxies
Current theory states that most galaxies, including dwarf galaxies, form in association with dark matter or out of gas containing metals. However, NASA's Galaxy Evolution Explorer space probe identified new dwarf galaxies forming out of gases lacking metals. These galaxies were located in the Leo Ring, a cloud of hydrogen and helium around two massive galaxies in the constellation Leo.
Local dwarf galaxies
There are many dwarf galaxies in the Local Group; these small galaxies frequently orbit larger galaxies, such as the Milky Way, the Andromeda Galaxy and the Triangulum Galaxy. A 2007 paper has suggested that many dwarf galaxies were created by tidal forces during the early evolutions of the Milky Way and Andromeda. Tidal dwarf galaxies are produced when galaxies collide and their gravitational masses interact. Streams of galactic material are pulled away from the parent galaxies and the halos of dark matter that surround them.
The Milky Way has more than 20 known dwarf galaxies orbiting it, and recent observations have also led astronomers to believe the largest globular cluster in the Milky Way, Omega Centauri, is in fact the core of a dwarf galaxy with a black hole at its centre, which was at some time absorbed by the Milky Way.
Common dwarf galaxy types
- Elliptical galaxy: dwarf elliptical galaxy (dE)
- Dwarf spheroidal galaxy (dSph): Once a subtype of dwarf ellipticals, now regarded as a distinct type
- Irregular galaxy: dwarf irregular galaxy (dI)
- Spiral galaxy: dwarf spiral galaxy (dS) 
- Magellanic type dwarfs
- Blue compact dwarf galaxies (see section below)
- Ultra-compact dwarf galaxies (see section below)
Blue compact dwarf galaxies
In astronomy, a blue compact dwarf galaxy (BCD galaxy) is a small galaxy which contains large clusters of young, hot, massive stars. These stars, the brightest of which are blue, cause the galaxy itself to appear blue in colour. Most BCD galaxies are also classified as dwarf irregular galaxies or as dwarf lenticular galaxies. Because they are composed of star clusters, BCD galaxies lack a uniform shape. They consume gas intensely, which causes their stars to become very violent when forming.
BCD galaxies cool in the process of forming new stars. The galaxies' stars are all formed at different time periods, so the galaxies have time to cool and to build up matter to form new stars. As time passes, this star formation changes the shape of the galaxies.
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Ultra-compact dwarf galaxies (UCD) are a recently discovered class of very compact galaxies with very high stellar populations. They are thought to be on the order of 200 light years across, containing about 100 million stars. It is theorised that these are the cores of nucleated dwarf elliptical galaxies that have been stripped of gas and outlying stars by tidal interactions, travelling through the hearts of rich clusters. UCDs have been found in the Virgo Cluster, Fornax Cluster, Abell 1689, Coma Cluster, amongst other clusters. An extreme UCD example is M60-UCD1, about 54 million light years away, which contains approximately 200 million solar masses within a 160 light year radius and its central region packs in stars about 25 times closer together than stars in Earth's region in the Milky Way. 
Partial list of dwarf galaxies
- Aquarius Dwarf
- Canis Major Dwarf Galaxy
- Henize 2-10
- I Zwicky 18
- IC 10
- Large Magellanic Cloud
- NGC 1569
- NGC 1705
- NGC 2915
- NGC 3353
- Pegasus Dwarf Irregular Galaxy
- Phoenix Dwarf
- Sagittarius Dwarf Elliptical Galaxy
- Sagittarius Dwarf Irregular Galaxy
- Sculptor Dwarf Galaxy
- Sculptor Dwarf Irregular Galaxy
- Sextans A
- Sextans Dwarf Spheroidal
- Small Magellanic Cloud
- Tucana Dwarf
- Ursa Minor Dwarf
- Willman 1
- Carina Dwarf
- Draco Dwarf
- Fornax Dwarf
- Leo II (dwarf galaxy)
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- Milky Way Satellite Galaxies
- SPACE.com article on "hobbit galaxies"
- Science article on "hobbit galaxies"