This puzzle is done in honor of JLee's wonderful Words and Phrases series of puzzles. JLee must be really proud of us now.
If a word has a certain property, I call it a Close-by Word™.
In each of sentences below, one is a Close-by Word™ and one is not. Cases and fonts have no bearing in the property of the word. Sentences are for context only. Only knowledge of English is required.
1. The (elf / dwarf) fights an army.
2. The device (slashes / reduces) fatalities.
3. We will (wax / defeat) the competition.
4. A young man (created / invented) a time machine.
5. I wish I was (driving / flying) across the country.
6. People should not (jaywalk / cross) the street.
7. Taxes will (increase / decrease) over time.
8. The house has this (classic / modern) look to it.
9. The shadow will (loom / tower) over us.
10. Nothing is as (strange / queer) as that.
What is a Close-by Word™?