If Tom manually sets that as their capitol, they could continue a little while longer :p
He only did that for Outer Tilog and it's probably the only time he ever will. He (like many others) has a fondness for OT so it was probably just a "I don't want to lose you" favour.
The Caerwynians have given up anyway, they're all making their way over to Madina to help us win the war. Their reward will be the Candiels duchy
