There's nothing wrong with RPing whatever the hell you want, wherever the hell you want, and nobody is stating otherwise. What some of us jaded folk who have seen a lot say, however, is that the potential is limited.
I've seen many super active cores settle up in isolated corners, because isolation sounds really cool, but the problem is... if you are always with the same people, doing the same thing, with nothing to fight over... it gets repetitive, fast. You end up just not having much to say to each other anymore. Wanna RP strolling down the bazaar? Great, do it! Think you'll have fun writing your visits to the bazaar every single day, though? Think many people will bother to read your 17th "visit to the bazaar" RP?
Diversity is the spice of life. Which is where neighbors come in. When other realms are nearby, and if you interact with them (such as with war), then you are regularly getting in contact with people that you otherwise don't see every day. People whose experiences are vastly different to yours. And rather importantly, those are interactions that aren't fully predictable. If you want to RP going to the bazaar, you'll decide 100% of how it happens, and it's easy to run out of ideas after a few tries. If you fight in a battle, though? These are dozens and dozens of game-generated lines of text, full of gems to RP upon. Who hit who, who retreated when, who got wounded, who didn't follow formations, who retreated early, etc.
Not all realms need wars, though, even if wars can be gold mines for activity. Heck, some wars can monopolize resources so bad, that they leave little room for anything else. I've known a number of realms, for at least some periods of time, that were really fun, without necessarily fighting any battles. But those that were fun for more than a brief moment always had meaningful interactions with other realms, and often the threat of war looming by.
