Which Spanish court had a formal role for dwarfs, painted with dignity by Velazquez?

The Habsburg court in Madrid under Philip IV, which kept a number of people with dwarfism and other conditions in formal household positions - and Velazquez painted them repeatedly, at full length, in the same manner and often the same scale as princes.

That is the striking part. European courts across the period kept such people as entertainment, and the visual convention was to render them as comic or grotesque. Velazquez did not. His portraits of Sebastian de Morra and Don Diego de Acedo give them direct, appraising gazes and no props of mockery, and they are painted with the same seriousness as the king. Whether that reflects his own view or the court's unusually formal treatment of these positions is argued, and the paintings themselves do not read as jokes.

One of them is in Las Meninas, standing among the royal party as a member of the household rather than as an ornament. Velazquez had spent decades at that court working his way up an aristocratic hierarchy that considered painting manual labour, and it is not much of a stretch to see an interest in who gets painted as a person.