In my desultory researches into this region's rural heritage, I came across mention of the Mud Folk, or Mud People, in a footnote to a poem by Edmund Bolingbroke, entitled 'The Unseasoned Traveller' (published by Enderby and Son, Louth, 1801). Bolingbroke quotes at length from an unknown (and untraceable) manuscript originally written by a monk living at Barlings Abbey, one Brother Anselm. The manuscript was translated in the 17th century by an ancestor of Bolingbroke's, Roger Folkingham, who met his unfortunate end fighting for the losing side in the English Civil War at the Battle of Winceby, only a few miles from his family home.
There be in those parts many mudd folk, whose lack of civility, lerning and goode speach is thus shewn forth in their appellation, as creatures issued from the wet clay of the fennes, endowed with none but the rudest of animal vigours. This makes them to be wilde, ungovernable, without the reach of reason, cruel to beast, women and children alike, drunken and violent, malodorous in person and a great nuisance to parish and good folke. It is said their own dwellings are construed out of mudd and dunge...
It seems that the terms mudfolk or mud people were in fairly common use from the Middle Ages up to the seventeenth century, when then gradually disappeared, to be overtaken by more specific (and less pejorative) terms, such as 'slodgers' and 'fen tigers'.
I have encountered the usage myself only in occasional books and once from the lips of a living person. This was during a moment of ire from a neighbour complaining about the behaviour a large family who lived close by: They're nothing but bloody mudfolk!
As for Edmund Bolingbroke, I have no explanation for his extensive quotation on this point, there being only minor relevance to his poem. I can merely surmise that he was either wanting to impress his readers with his literary lineage or had encountered some mudfolk himself and was seeking revenge through the printed word.