Strutter (Malcolm Dixon), Og (Mike Edmonds), Fidgit (Kenny Baker), and Vermin (Tiny Ross) are the remainder of Randall's gang: former employees of the Supreme Being who thought it would be great to run off with the map on a cosmic joy ride. They don't have much in the way of personalities—not with Randall and Wally duking it out for the head spot. Vermin eats, Fidgit smiles, Strutter snarks, and Og isn't bright at all.
So, why dwarves? Well, for starters, bringing in little people is a good way to hook kids into the story. It lets Kevin become the natural leader—as opposed to Randall, who's always demanding respect he hasn't earned—and it lets kids in the audience feel bigger than the ostensible grownups dragging them along on their adventures.
On a more meta note, casting these performers gave them a chance to play real characters instead of relegating them to sad careers of permanent Oompa-Loompadom. Turns out, these guys are pretty darn good actors, and Gilliam was clearly happy to let them show us what they were made of.
Beyond that, the dwarves don't do much but bicker and fight...which is pretty much why they're here. The heart of comedy is pratfalls—the wonderful moment when a man meets a banana peel—and Time Bandits gets a lot of mileage out of watching these guys devolve into vicious slap-fights once their harebrained schemes go wrong.
But there's more to these guys than just "little things hitting each other," as one of our favorite French emperors once said. Are you wondering why there are six of them, and not seven or five or 23?
Well, that number coincidentally happens to be the same number of men in Monty Python, and as observers have noted, their personalities match those of the Python troupe: the self-important Randall is Cleese (who has a reputation for wanting to take charge of everything), the kind, quiet Fidgit is Palin (who everyone claims is wonderful to work with), and so on.
It seems Gilliam intended the dwarves to be a comment on the Pythons and their success: bickering their way into one misadventure after another and periodically vanishing from reality into realms of pure imagination. It's pretty fitting, then, and while it leaves a few scenes feeling crowded, we'll happily take it.