As all races in the past, present and future, the races might work together or fight each other and for that alliances are forged or torn down. some are centuries old and some come up and dissapear in a short time. Months or even weeks.
Magic, like Technology is used for all kinds of tasks. Magic is used for one of the most important things here: communications. This is primarely what makes the mages and wizards exceptionally powerfull.
Technology has also brought advantages. and mixed with magic it can become a powerfull combination, used for good and bad.
The pious users of religion use their causes also to promote good or bad, where good or bad is depending on the point of view. The pious pray mostly to gods, sometimes to objects (in their preception related to gods). There is a wide variety in the Pantheon of Gods.
A problem with morale is that it is hard to determine what is good and what is bad. The morality question is something the scholars still debate on. All races and factions and even guilds reason, deduce and eliminate to the best of their knowledge and try to get along. (Although eliminating each other more often then not.).
The Gods are mostly arguing and fighting with each other and don’t mind the inhabitants of Dinas Emrys]. Gods have in fact forgotten what power comes from praying followers and underestimate the impact of the diminishing numbers.
The world has known a few decades of piece, but things are changing. Something dark is stirring. Some priests feel the absence of the Gods as a result of diminishing people praying, some get premonitions, seeings or just feel the darkness encroaching. They try to reinstate their religions, houses, temples and whatever else they need or want to do to draw people in, but most people shake their heads and some openly disgrace the priests by calling them liars and frauds for not bieng able to cure an illness or help out.