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Developer choice. Greenskins and Dwarfs can only capture each others settlements, same with VC and Empire/Bretonnia. Chaos and Beastmen can't capture any settlements, and while the Wood Elves can capture any settlement, they can only build small one-slot outposts outside of their forest.
That sounds really dumb. Well, I wish I've done some research before wasting 10 bucks on this.
People tend not to live under mountains and vampires tend to live where they can get people easily. As mentioned there is a mod, officially supported and released on day 1, that removes this feature. I suggest you give the game a try first before you decide to install it.
It really doesn't make a bit of difference as far as how enjoyable the game is. Go conquer the Empire lands and use the unconquerable territories as a money pinata. Dwarf settlements are rich, so you still have an incentive to loot and raze them.
Learn to read you moron.
1500+ hours in empire
2000+ hours in rome
about 500 in medieval and rome 1 combined
also about 200 hours in attila surprisingly especially with the bad optomization
I wouldn't start applying logic in a game with Dwarfs, Goblins and Vampires but anyways. Thanks for the tip. I found the mod which seems quite popular actually.
Fantasy creatures use logic too. I think it adds an interesting dynamic to the game, not quite as easy to snowball and you always have an uncertain border. But not everyone feels that way, hence the mod. Enjoy the game. Oh and you might want to build Garrisons buildings in all your towns, helps keep the odd raider away or makes them regret attacking.