Competition for lords? In smaller less active realms you have the same people as lords forever. The less regions there are, the less competition.
Doesn't really defeat the point of density either. There is still a hard limit for each realm, just a more realstic one given the number of players continent-wide.
Actually, I can see how this can be a problem on Dwi. I guess I was thinking about EC and BT when I made this suggestion.
