Fantasy setting for GURPS campaign. Tech level is standard swords and sorcery, broadly TL 3.
Multiple countries with each race, not just generic "elf land" and "dwarf land". Also religions can cross borders. No stereotypical "evil" races, they are all just different with conflcting desires and outlooks.
Magic exists with a variety of tolerances by countries. Religions grant magic to their adherents.
Elves and Dwarves have historic feud. Originated by elvish long-life compared to dwarves (which are more akin to human lifespan). They were operating on a much longer time frame and disagreements arose when dwarves were not adhering to something agreed to centuries earlier. Potentially around area disputes as dwarves looked to expand into elvish areas? Change to Elf/Lizardmen - explains lizardman ruins now and avoids yet another elf/dwarf war.
Elvish civil war, "Dark" elves split off. They were researching forbidden magics and technology, warped experiments. Allied with some dwarves who were venturing in similar direction. Allied together still. Sea elves left in disgust at the civil war, boarded ships to sail but sank in a storm, believed dead but live in cities under the sea unknown to all.
Main elvish country now keep distance from "barbarians" who can't be trusted and have nothing much of value. Medieval China style. Also Japanese aspects to culture - aim for perfection in things, rounded skills so warriors also flower arrange or write poetry. Not so much of the seppuku death culture though, life is precious.
Humans arose and are competing. Roman type empire, saxon/teutonic, mongol/rohan areas. Pirate Isles.
Historic lizardmen empire in desert, now in ruins but they survive. Large beetles as pets/beasts of burden. Live partially underground in buildings and stuff hollowed out of rock. Have water condensers. Small clans. Internal warfare over oasis and rivers. Pushed away from main river? Or was destroyed by magical warfare?
Orcs are present, but not the brutish evil race in other works. More of a "savage" nomadic style. They are hardy due to nomadic unsheltered life. Allied with exalted horses, however largely kept secret?
Bridge country / freeport. River is border between two nations in conflict. Now at peace but with tariffs etc on each other or restricted trade. People used to meet and trade on a bridge between them. Then stalls appeared on bridge, then buildings. Now it's a small city built over the river. Perhaps marshy ground, hence neither country took it and gives more room for buildings / a city.
Have the subraces (i.e. High Elves, Sea Elves, Hill Dwarves) as ethnicities under the main species descriptions.
Magic and Gods exist. Gods are effectively magical beings that aid channeling mana. Not sure why, what they get out of the deal. Mages have more formal training in general mana manipulation. Clerical magic requires adhering to vows, and has restricted spell lists - so need some advantage, cheaper in points? Easier casting?
Selentine has pantheon with various spell lists. Generally open to new gods providing their adherents play nice. Disagree with the "atheist" magery, distrusts thinking it is coming from some deceitful God or untamed