Dwarfcraft

Terrafirmacraft allegedly is a step toward a Dwarf Fortress-style experience in Minecraft, but I agree with the commenters on this thread on the Dwarf Fortress forum that it imports the wrong pieces of Dwarf Fortress. The gameplay remains entirely Minecraft-style, with the player performing all tasks directly and alone, but with some Dwarf Fortress-like ores and tasks mixed in.

TESTIFICATEs and Millenaire villagers provide NPC mobs that to some extent "fill in" the world with other beings, but TESTIFICATEs are simplistic and boring, and Millenaire villagers aren't under the player's control. For a Dwarf Fortress experience, the player needs to be connected directly to the NPCs.

The Dwarfcraft mod (concept) aims to provide true Dwarf Fortress-style gameplay within Minecraft. It is not intended as a straightforwardly faithful clone, but rather as an adaptation of the same feel in a different context; the end result will be similar to managing a team of Minecraft players in a Minecraft world.

Embark
The world creation screen will not depart from Minecraft's default. Players choose seed and difficulty, but will not have a choice of site or starting equipment. This will encourage a "drop right in" experience of immediate gameplay.

By default, each task is enabled for one dwarf (plus one more for digging), so that any tasks the player designates will be started without the need to fiddle with assignments early on.

All starting dwarves are unrelated and unmarried by default, and evenly distributed across the sexes.

Player perspective
Steve disappears. He is invisible, and cannot break blocks, place blocks, carry items, or fight mobs. He only dies if all of his dwarves die.

Mobility
The player flies as in Creative mode and can pass through walls. This is essential for designating areas to be dug out inside of solid earth.

Crafting
The player's inventory screen is replaced by a modified Creative mode item selection screen. Only items that may be crafted or smelted using the contents of chests or the dwarves' inventories are shown (probably transitively a la Crafting Table III). The player may select an item, enter a quantity (default 1), and click Craft, and any dwarf with Crafting enabled will attempt to make that item (retrieving ingredients from chests and using a crafting table or furnace as required). A Repeat Daily checkbox allows the player to specify that this task should recur. Queued crafting requests are shown on an additional tab on the same screen.

Storage
If the player right clicks a chest, its inventory screen is supplemented with a new tab that controls which items may be stored there, with a default of Any. If an idle dwarf has a surplus of any item that can be placed in some chest, he will go to it and store it there. For things like armor, food, and tools, a surplus is considered any item beyond 2; otherwise, it is any item not needed to satisfy an ongoing task (i.e., a stack of cobblestone needed for a wall will not be stored).

Time
Dwarves need 3 meals per day, and seek to eat them at regular breakfast, lunch, and dinner times. To allow sufficient time for this and other tasks, the day/night cycle slows to 30 minutes of light and 30 minutes of dark. To avoid immediate starvation, each dwarf starts with 6 loaves of bread in his or her inventory.

Dwarves also need sleep, which they normally do at night, in beds. Dwarves with defense tasks enabled will strive to keep at least one of their number on duty at all times per defense point, adjusting their sleep schedules accordingly.

Companions
TESTIFICATEs are resized and reskinned as dwarves. Seven of them spawn near the player. If they all die, the player is killed and may respawn (including with a fresh set of dwarves) or not depending on whether they started in Hardcore mode. Their names appear above them as if they were players.

The player may press (shift-)tab to teleport to each dwarf in turn. The player's most recent non-dwarf location is included in the teleport destination loop, to make it easier to check quickly on their activity while working in a remote location.

Each dwarf starts with a full set of randomized dyed leather armor, for easy visual identification of individuals.

Each dwarf functions as a world anchor, keeping chunks loaded and spawning mobs. To discourage the player from wandering too far away, all dwarves suffer penalties based on the player's distance from the nearest dwarf: Note that since the penalty is uniform rather than individualized, the player is free to spread out many dwarves over a large base, as long as at least one of them remains within a reasonable distance.

To prevent the penalties from being circumvented via tab-key teleportation, they will be applied whenever the player spends 1 or more seconds out of range within any 10 second interval. If the player finds a way to cause one dwarf to wander away with him while leaving the rest behind, more power to him.

Announcements
Mimicking Dwarf Fortress's message log, individual dwarves emit chat messages when interesting things happen.
 * Damage taken
 * Ore discovered
 * Task completed
 * Starving
 * Hostile mob
 * Stuck

Interaction
Right clicking a dwarf opens a screen of info about that dwarf:
 * Name
 * Age
 * Sex
 * Family tree
 * Health bar and hunger bar
 * Inventory (same size as player's in vanilla)
 * Assigned task checkboxes
 * Farming
 * Logging
 * Digging
 * Building
 * Crafting
 * Defense

Scale
In my opinion, Dwarf Fortress's endearing personalization of its subjects decreases in effectiveness as the number of dwarves in a fortress grows. Once you have 200 little dwarves milling around, it simply isn't feasible to search through all of them to find one suited to a particular task, let alone enjoy their cute attitudes and preferences. But on the other hand, interesting tasks often require a larger workforce, and certain mechanics only unlock at high population sizes.

To preserve the fun of familiarity with individual dwarves, Dwarfcraft will aim for a population limit of 32. Task completion speeds will be tailored to this goal (so that "interesting" things may be done with 20-30 dwarves), and the limit should be approached asymptotically to avoid big discontinuities (so breeding slows down the closer you get to 32). In general, it should be difficult to hit the population cap, with a typical population hovering somewhere in the teens.

Breeding
"Migrants" wouldn't make much sense in a Minecraft world, so population growth must happen via breeding. Dwarves will tend to form breeding pairs influenced by an incest taboo. The pregnancy mechanics will be fine-tuned during play testing.

One additional possibility is to allow the player to recruit new dwarves from TESTIFICATE villages, but I think this would be a minor gain in exchange for the major complexity of defining player interactions with neutral NPCs, fine tuning a recruitment process, potential for warfare, etc.

Idling
Idle dwarves (with no active tasks) will seek to be within 8 blocks of other dwarves. In order, they prefer: This should allow dynamic determination of appropriate "meeting places".
 * 1) Dwarves eating meals
 * 2) Other idle dwarves
 * 3) Working dwarves

Special roles

 * Treasurer: The player may choose one dwarf to carry the most valuable items, for more careful monitoring and protection. Any dwarf discovering a diamond, for example, will bring it to the Treasurer.

Dig
If the player left clicks a non-tree block, a digging designation screen appears. Several tabs allow the player to choose what overall type of digging should be done at that location, with additional parameters available in the tab. Unlike a typical Minecraft dialog, this window is not centered on the screen; rather, it is off to the side or bottom (maybe transparent/translucent?), to allow the player to see the area being designated. As changes are made to the values in the dialog, the area designated to be dug out is highlighted in a partially transparent yellow wireframe. Once the player is satisfied with the designation, they click a Dig button in the dialog, which closes, and the wireframe highlight persists until the task is completed or cancelled. A checkbox allows the player to make the current designation the new default for that type of digging.

Log
If the player left clicks a tree block, that tree is marked for harvesting, and any dwarf with logging tasks enabled will harvest it, including all log blocks plus saplings. Left click leaves to harvest them as leaves instead of saplings.

Build
If the player right clicks a block, a building designation screen appears. Similar to the digging designation screen, it is positioned to avoid obscuring the view, and it contains tabs and fields that allow specification of structures to be built.

All types of construction share a Material parameter, defaulting to Any Available. When clicked, the Creative mode block selection screen opens, but filtered to show only items that are present in at least one chest or dwarf's inventory. Similar to digging, a hologram of the chosen construction appears as a preview. After the player selects the building type and clicks Build, the hologram remains until completion.

Farm
Shift-right clicking a dirt block marks that block for farming; any dwarf with farming tasks enabled will hoe it, plant seeds, and harvest wheat.

Defend
Shift-left clicking a block marks that block for military attention. Any dwarf with defense tasks enabled will idle around it and hold his ground rather than fleeing during hostile mob attacks. Multiple defense areas will be treated as patrol waypoints.

Left clicking a mob designates it to be attacked by any dwarf with defense tasks enabled. That dwarf will also pick up any drops.

Out of scope
Precise Minecraft-style building, such as careful placement of upside-down stairs or slabs for aesthetic purposes, will not be attempted.

Only eating, not drinking, is required.

No yearly seasonal cycle will be attempted. The chief purpose of this in Dwarf Fortress is to mark the passage of time and vary the challenges of survival, but I think the day/night cycle will be sufficient for this (i.e., day number replaces year/season, hostile mobs attack at night).

New items such as furniture will not be added; the Minecraft world flavor will be preserved.

Happiness and dwarf thoughts will not be implemented, since Minecraft players seem to want to make things look nice already.

Nobles will not be implemented.

Undecided

 * Bed ownership
 * Hostile mobs more like goblins/orcs with sieges