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Morrowind was built more like a "traditional" cRPG in that it has a story to tell you and not a blank canvas that you can write whatever you want on. There were also some other changes, like stripping abilities and skills down, character creation being stripped down, etc. The biggest jump from Daggerfall to Morrowind was the game direction, while the biggest jump between Morrowind and Oblivion (and later, Skyrim) was the game mechanics and how they have been simplified and stripped down.
Not saying you can't find these kind of games anymore, you sure can, but the big studio will try to appeal to the masses and therefore dumb their mechanics (and now try to paywall as much as they can, that's the new trend).
Morrowind decided to be very intentional about everything. Where as most enemies in Daggerfall are typical fantasy fair, from Centaurs to Imps, Morrowind has mostly new and unique creatures. Each dungeon is also thoughtfully put together, the world is thoughtfully put together, everything feels intentional and thought out.
Anyone who is saying Morrowind is 'dumbed down from Daggerfall' probably considers actual level design to be 'dumbing down' from the geometric labyrinths of Daggerfall that all looked the same and usually left you getting literally lost.