A Crisis of Population Density
A static, hereditary aristocracy seems illogical in a world where adventurers accumulate wealth and power in epic proportions. My aim is to describe a setting that is much more an extrapolation of the D&D rules, rather than an emulation of a pseudo-Medieval, low fantasy setting.

Which is not to say that Helsmuth and Eastrealm do not contain pseudo-Medieval elements and an aristocratic class. However, that is not the driving force of civilization. Instead, the basic building block is the adventurer who achieves "name level" and establishes a stronghold. This harks back to 1st edition AD&D, which is part of why I like it, but is still just as relevant in 3rd edition (particularly with the Landlord Feat as described in the Stronghold Builder's Guidebook, and the Leadership feat as described in the DMG).

Many sourcebooks such as A Magical Medieval Society: Western Europe and Dungeon Masters Guide 2 are founded on the assumption that the default D&D setting is a simulation of medieval Europe: a rigidly structured social hierarchy with the nobility/church at the top and serfs at the bottom.

However, to me D&D is much closer in feel to the wild west: isolated communities surrounded by vast tracts of badlands and untamed wilderness inhabited by hostile "savages". The local sheriff and his deputies try to enforce the law as best they can, but many outlaws have little respect for the conventions of civilized men. 

Feudalism 3.5

At 9th level, a character can take the Landlord Feat. This provides funds to build or expand a stronghold, starting at 25,000gp and increasing each level. Additionally, any money of his own that the character spends on his stronghold is matched by the landlord's contribution.
  • In the case of fighters, this feat represents a noble title granted by their liege lord. The character then has a feudal obligation to maintain an army, defend his territory from monsters, and come to his lord's aid in time of war.
    In some cases, the noble title might not be earned through impressive deeds, but might be inherited from a deceased relative.
  • For clerics and paladins, the feat represents labor and materials supplied by their religious organization, for the purposes of establishing a place of worship. Of course, there are no shortage of warlike deities in D&D, and so many of the military obligations also apply. The stronghold often includes facilities for the construction of magic items (healing potions, and the like).
  • Monks might establish a monastery in a remote area, or a martial school within an established settlement.
  • Successful Bards construct their own theatre. The funds from the Landlord feat represent the sponsorship of wealthy patrons of the arts.
  • Thieves build a secret hideout for their organised crime syndicate, filled with traps and secret passages. If there are several powerful rogues in the city, then each will claim a district of the city as their territory. See Gary Gygax's Canting Crew for more details.
  • Wizards seek a quiet location for arcane study and contemplation. Generally, they are loathe to be disturbed, and protect their privacy with a wide range of magical defenses.
Barbarians, Druids and Rangers tend to live a nomadic life, and are therefore unlikely to ever settle down and establish a stronghold. A Druids' Circle will be established in a place of great natural beauty, which is likely to be outside the city limits. Elves and others who love nature will gravitate towards this location for their homes and businesses.

Build It, And They Will Come

According to the 1st edition DMG, any random encounters of a "suitable" type might decide to establish a permanent home within your demesne. Of course, any monsters that aren't driven off by your patrols will likewise make themselves at home. If you decide that 20-200 orcs might make good neighbors, then more power to you.

In this manner, your shell keep or hill fort might develop organically into a thriving city-state (over many hundreds of years, of course ...). The city of Marchion in Splintered Peace is a nice example of such a history: what started out as a paladin's castle gradually evolved into a trading post, then a mageocracy, and finally a small city with an elected council.

Marchion also illustrates another interesting feature, which is that it is built on the foundations of an ancient civilization. Fortifications (and by extension, cities) are built in strategic locations with access to bountiful resources. Empires might rise and fall, but if such conditions persist then future generations are likely to re-settle the same spot. Real-world historical cities such as Troy developed in this manner - not to mention the many European cities that were abandoned by their inhabitants following the collapse of the Roman Empire, but then resettled at a later point. This gives a basis for the idea that every metropolis is built atop sewers, catacombs and other subterranean construction from a bygone era. Megadungeons, ahoy!

Links

Medieval Demographics Made Easy: Numbers for Fantasy Worlds (S. John Ross)

Manorial system vs. farmland (Rob Conley)

More on historical medieval demographics contrasted with D&D

On The Loss of D&D's Endgame (James Mal)

Boxed Set 3: Companion Rules (the 'C' in BECMI)

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