"Dwarf cichlid" is an ill-defined term. It supposedly means any small cichlid, with certain exclusions such as the dwarf shelldwellers.
In general, though, "dwarf cichlids" includes fish such as the various rams and apistogramma as well as things like Kribensis
Most of these make pretty good community fish, although they might try to eat very small fish. I know my male krib tried to eat an adult male Guppy
(and ended up fatally wounding him). Many dwarf cichlids are very easy to breed so if you get more than one, be careful as a breeding pair of dwarf cichlids can be quite aggressive. Also, cichlids have something of a "sixth sense" about knowing which other fish are cichlids. For example, my ram did not get along with my kribs but neither fish pays any attention to fish like cories, danios, even dwarf-cichlid like fish like Badis badis
that aren't actually cichlids (although there are exceptions to this - one of my dwarf gouramis hated my female Kribensis
, for some reason). So, to put it another way, having multiple dwarf cichlids in the same tank can be problematic as it could a) cause fighting between them or b) breeding, which could make them hostile to your other fish. If you want more than one in the same tank, just be careful about choosing the sexes and be sure you have plenty of decor to provide them with hiding places and territories.