I completely share the sentiment of smaller realms with more engaged characters, but it doesn't always work out in practice. If it could be done anywhere, it'd be Dwilight.
Well, the scale of Dwilight, and too a less extent, AT or BT, means that realms can be big, because there will be many other realms as well, so the continent as a whole will be dynamic. When you have a small continent with many big realms, things tend to be static.