I think there's a bit of misunderstanding of what's going on here. The idea is that no Imperial citizen would willingly go and move into a greenskin camp or a dwarven mountain hold. So there would be no citizenry to actually make the settlement function. When the empire is fighting against the greenskins or dwarves, it's either defensive or is going to be a war of extermination. In the same vein, human settlements aren't really "orky" enough, so the orks would rather burn it down (and slaughter all the civilians), and there's just too much damn sunlight for the dwarves.
The idea is the number of settlements you can actually own is gonna be limited, but you can still grind everyone else into dust. From a Total War perspective, I can see how it's disappointing; from a Warhammer perspective, it makes a lot of sense. Especially since this game seems to be leaning more "Warhammer in the Total War format" than "Total War in the Warhammer universe."
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