What I’m thinking is this: a vast, ancient elven empire, called simply the Empire, that dominates the western half of the continent. The elves are neutral, shading towards a kind of practical lawful evil, but only a little way. Just a dark grey. The only exception to the elven domination in this part of the continent is a northwestern peninsula, which is populated by a resolute kingdom of mountain dwarves. Underneath the peninsula, there’s a kingdom of drow which survives with assistance from the Empire. The drow kingdom is a cult of personality, worshipping the Living Presence of their goddess. The Living Presence tells lies about his kingdom’s power, and his people believe him. The mountain dwarves would like to reclaim the tunnels and caverns, and they could probably manage the drow on their own, but the Empire? No way.
Off the coast, there’s a small string of islands, very advanced culturally, populated by a race of island dwarves. I’d have to write up the subrace, but think of otters. They are not particularly friendly with their mountain cousins and they really don’t like the Empire.
There’s also a single island which was settled a long time ago by a subrace of wood elves who rejected the militaristic ways of the mainlanders. This is a subject of much friction. Fortunately, this island (and the two dwarven kingdoms) have a mutual defense treaty with the humans who live across the sea. It’s believed that the humans have mastered enough sorcery to do huge amounts of damage to the Empire in a conflict; nobody wants to find out what the cost of such a conflict would really be.
The most important city of the campaign is a settlement on the coast of the Empire, which was deeded to the humans a hundred years ago. It’s a key city, because it’s the best place for humans, dwarves, and elves to mix freely. The drow don’t go there. Everyone else does. It’s corrupt, vital, and very much alive. There’s another human settlement a little bit south, administered by a different human nation: it tends distinctly towards the evil. I suspect the humans there are necromantic.
(The correspondences are not intended to be exact.)