To understand this post, I need you to go read this post from False Machine. Ready? OK, let's move on.
The Derros are characters with a history before D&D, and Patrick Stuart's interpretation of them in Veins of the Earth is my favorite iteration.
Whereas he relies on these wonderfully flavorful and evocative splorshes of text to give you a sense of the Derro, I am going to give you practical advice on using them in your games.
Metatextuality
The Derros understand that they live within a metatext. This is a terrifying existence for them. The second they are forgotten or unobserved, they do not exist. In the frenetic moments that they do exist, they put all their thought into escaping.
The Derros recognize that PCs are special. They torture various "named" creatures to see if they are PCs, but can quickly find out that they are not. They interrogate PCs to understand the "Machines" they use.
A machine is a game mechanic.
The Derro lack the language to describe game mechanics, but understand some things as metaphors. A book of rules. Fate is random chance--sure, call it dice. These are all machines.
They ask about the machines. Is the book brown? Is the book little and brown? Does it come in a white box? The one that is brown does not come in a white box? Do not lie.
They address the "people behind your eyes." The people who "inhabit your skin."
They want to go back with you to the "upper world."
Every encounter with the Derro has this motif, has this refrain.
Eventually, the PCs will begin to understand the gimmick the GM is trying to pull with the Derros. Then, they are infected.
The Ludologic Plague
Derros carry a magical disease called the ludologic plague. When PCs start wondering out loud, at the table, if the Derros understand that they are in a game--BAM!
Every time a player says something about the Derro understanding the real world, the GM takes a post-it note and puts it inside the book. Put it anywhere. The game text hidden by the post-it note no longer exists. The GM can't see it, the players can't use it. The post-it note represent the ludologic plague spreading.
If the players ever tell the Derros about the "machines." If they ever metagame and start talking, in character, about the mechanics of the game--the PCs become infected themselves.
Put a post-it note over parts of the PC's character sheet. That part does not exist. That part cannot be read.
The Derros have false machines that can control the plague. They can write on post-it notes that exist in the real world. They can rewrite the rules for reality.
Whatever is written on top of the post-it note is what the "real rules" are. Oh, you have PASTA HP now? Sure. That's how that works. You've always had PASTA HP. D&D is well known for giving fighters PASTA HP.
The PCs can beat the Derros up (in the game world) and break their false machines to erase (or rewrite) what is written on the post-it notes. But the notes can't be removed until the plague is cured.
The plague is cured by obtaining, in real life, a copy of the Veins of the Earth. Then, rip the pages out from 167-172. The Derro no longer exist. They can no longer hurt you.