I'm pretty sure that only Eru can create life. Aulë crafted the dwarves, but only Eru could grant them life. Melkor couldn't create orcs -- he corrupted elves into them. He couldn't create trolls, he corrupted Ents into them, etc.I thought orcs were created, not bred. In LoTR didn't we see them coming out of pods or something similar? Maybe they are sexless and just resemble men?