The Scythian
Explorer
They definitely predate 1977.Gnomes (up-scaled ripoffs of the Gnomes from the very popular book released in English in 1977) first show up in the PH in 1978
Gnomes appear as far back as 1971's Chainmail. They make it into OD&D in 1974, and the illustration of gnomes above the alignment table in Men & Magic depicts small men with beards and Phrygian caps. Even without the helpful caption "GNOMES", we would probably recognize them as such today.
I think that there's actually a very strong case that the AD&D gnome was Gygax's attempt to bring Hugi the woods dwarf from Poul Anderson's Three Hearts and Three Lions directly into the game. (I've made this case before, and when I figure out how to like to an older post in a different thread, I'll do that here. But for now, I'll plagiarize myself, possibly with some light editing.)
In the novel, Hugi is depicted as being just shy of three feet tall, with a comically oversized nose, earth-brown skin, a white beard, and white hair. His people have "working arrangements" with the creatures of the forest and live in "woodsy burrows." Hugi himself is such an adept burrower that he is able to identify sloping passages that confuse his human companion and also tell when his party is nearing the surface.
The AD&D Players Handbook refers players to the Monster Manual for details about the gnome, and what do we find there? Most gnomes have skin that is "wood brown" but some range to "grey brown." Their hair ranges from "medium to pure white." They stand three feet tall and up. Most live in the hills, but some make their home in burrows. They tame badgers and wolverines to serve as guard animals. They are able miners so, like dwarves, they are able to detect various features underground, and they are slightly better at it. In fact, turning back to the Players Handbook, we find that gnomes are specifically better than dwarves at detecting sloping passages and figuring out how far they are underground - the two abilities Hugi specifically displays in the novel!
The correspondence between Anderson's wood dwarfs and the AD&D gnome is so great than when the character was adapted for AD&D in Dragon #49, he was just referred to as a gnome with no changes made.
Turning the clock back, gnomes in Chainmail appear as a parenthetical variant of (or alternative to) dwarves. They are not distinct mechanically, but they and kobolds are described as mortal enemies in the same way that dwarves and goblins are. (This has nothing to do with Anderson or Tolkien, it's just that this is the only difference in the shared entry for dwarves and gnomes.)
Gnomes are not mentioned in OD&D's Men & Magic as a distinct race that players can choose, but they do make it onto the alignment table as "Dwarves/Gnomes", which is where the picture I mentioned above is located. However, dwarves are given the ability to identify certain features underground, which suggests that Gygax was probably thinking of Anderson's dwarfs as well as Tolkien's dwarves at the time.
In Monsters & Treasure, gnomes are described as the shy "cousins" of dwarves, who live in "hills and lowland burrows" and grow their beards longer but are otherwise very similar to dwarves. There are some minor mechanical differences (gnomes are more likely to be encountered in their lairs, their treasure type is different, and they have slightly worse AC). The "hills and lowland burrows" bit is probably a reference to woods dwarfs, which is more evidence that Gygax was thinking of Anderson's dwarfs as well as Tolkien's dwarves.
In Supplement I: Greyhawk (1975), the gnome is explicitly listed as a playable type of dwarf for the first time, with the distinction being that gnomes are identified as burrowers, which I think is additional confirmation for my theory that gnomes are basically Anderson's Hugi as a race.