Most or all essential NPCs are protected from dying. The dwarven council member usually moves down to the house just south of the axe monument after you first talk to him (one person reported finding him up by the town crier). Sometimes he remains hidden if he is standing by a wall, so try running around the house near the walls if you don't see him right away (and check for green crosses on your mini-map).
There is also a method for
Reviving dead NPCs, but I doubt it will be necessary.
