We present a new set of high-resolution hydrodynamic cosmological zoom-in simulations that apply the Feedback In Realistic Environments physics to both Local Group (LG)-like and isolated MilkyWay (MW)-like volumes (10 host systems in total with a baryonic particle mass ≃3500-7000M⊙).We study the stellar mass functions, circular velocity or mass profiles, and velocity dispersions of the dwarf galaxy populations. The simulations reproduce the stellar mass function and central densities ofMWsatellite dwarfs forM∗≥105.5M⊙ and predict the existence of ∼3 unidentified galaxies with M∗∼ 105M⊙ within 300 kpc of the MW. Overall, we find no evidence for the classical missing satellites or too-big-to-fail (TBTF) problems for satellite galaxies in our sample. Among the satellites, TBTF is resolved primarily by subhalo disruption and overall mass-loss; central density profiles of subhaloes are of secondary importance. For non-satellite galaxies, our LG-like simulations predict as many as ∼10 as-ofyet unseen galaxies at distances 0.3-1Mpc from both hosts, with M∗≃ 105-6M⊙ (in haloes with Vmax ∼ 20 km s-1), albeit with large halo-to-halo variance. None of our simulations produces a compact, baryon-dominated, high-density dwarf elliptical-type galaxy (with Vcirc ≳ 35 km s-1 at r < 1 kpc), of which six may appear in the LG (but none in the MW). It may therefore remain a challenge to reproduce the full diversity of the dwarf population, including both the highest and lowest density systems.

The past two decades have seen a tremendous investment in observational facilities that promise to reveal new and unprecedented discoveries about the universe. In comparison, the investment in theoretical work is completely dwarfed, even though theory plays a crucial role in the interpretation of these observations, predicting new types of phenomena, and informing observing strategies. In this white paper, we argue that in order to reach the promised critical breakthroughs in astrophysics over the next decade and well beyond, the national agencies must take a serious approach to investment in theoretical astrophysics research. We discuss the role of theory in shaping our understanding of the universe, and then we provide a multi-level strategy, from the grassroots to the national, to address the current underinvestment in theory relative to observational work.