the tool you used was either lasoo or magic wand.
lasoo: you can choose which parts you want to keep/delete by clicking around the selected area.
magic wand: you can adjust the strength of it, and if you have a good background (good as in contrast between yourself and background) it will select the main item. Adjusting the strength means that you can choose how much lee-way it gives with the colours.
tip: using the lasoo tool, you can select around your dwarf, and then press invert (default on most photo programs is ctrl+shift+i) and then delete. This will delete everything around what you have selected. Also when deleting, you can add a feather effect, the option is usually at the top. This will make the edges more rounded, and make the colours sorta fade out.
tip2: if you're going for precision: this is kinda basic, but dunno if you know:
if you zoom in all the way, and use the smallest brush possible, you can actually get rid of single pixels, e.g like above your dwarfs head