Shapeshifters are people of any race who are capable of turning into one or a small number of distinct forms.
Typically, shapeshifters have a humanoid form such as a human or elf, and are capable of transforming into an animal and possibly an intermediate or related form. For example, werewolves can turn into a typical human, a typical four-footed wolf, and a large hybrid man-wolf.
Shapeshifters are not necessarily simply a humanoid who can turn into an animal. Animals can be born shapeshifters, and are thus an animal that can turn into a humanoid. In an extreme and rare case of an abrupt inborn ability showing up, it may even be possible for a shapeshifter to have two distinct non-humanoid forms, such as a wolf that can turn into a bird without having a humanoid form at all.
The ability to shift form is a hereditary Change Magic trait, insofar as hereditary magical abilities are normally inherited. Not everyone born into a shapeshifting bloodline becomes a shapeshifter, but shapeshifter souls can only be born into a shapeshifting bloodline, under normal circumstances. Occasionally a random inborn Talent my pop up out of nowhere, or a ritual may be used to convey shapeshifting powers. But for the most part, werewolves bear children who can be werewolves.
When a shapeshifter mates with a non-shapeshifter, the children tend to favor the physical appearance of the non-shifter parent. For instance, a human-appearing werewolf who mates with an elf will have children that look entirely elven rather than half-elven.