Based on the life of Margarete von Waldeck. Her brother used small children to work in his mines and the children became deformed from all the working. The children were labeled as dwarfs. The old hag is a reference to an old woman who gave spoiled fruit to the workers. Margerete married the prince of Spain but the king didn't approve of the mariage so he had Margarete poisoned.
"Snow White and the Seven Dwarfs" Historical evidence:
The evil queen wanted Snow Whites beauty.
But the seven dwarfs were protecting her.
So the queen turned herself into an old hag and gave Snow White a poison apple while the dwarfs were away.
Then the Dwarfs got rid of the evil queen,
and the prince revived Snow White by kissing her.