Brief update, I've got code in now that allows for very basic civilization sites to exist, right now it is a directory of sites, listing the population and race, as well as holding a variety of values that describe the tribe that lives there. Right now it tracks the tribe's Diplomacy, Bavery, Strength, Intelligence, Dexterity, Size, and Savagery. My plan is to track populations in the same manner as resources, with values ranging 1 - 1000. This leads me into addressing deon's idea:
Here is my current vison for racial customization.
I don't want there to be an ingame workbench where you can sit down and choose strengths and weaknesses.
I think a much more interesting way of handling it is by having your mage tinkering with the genetic pools of the population. (not in a blast magic buff spell on village sort of way, but in a introduce foreign elves to a human village sort of way) This would move the village's statistics towards the stats that the introduced elves have. This opens up possibilities for then creating half breeds, with the game tracking the genetic make up of a population to determine their racial tag. (a city of 20% humans, 60% human/elves, 20% elves) would be a half elf village. The more generations that occur the more the population mixes, however is elven blood becomes too low of a portion, the decendants may eventually just be considered humans.
I wouldn't be opposed to including modability to races so that individual servers and single players can run their own sets of races, which could then be subject to the same tinkering.
I think that eugenics fits in a world where mages are tearing apart landscapes because it suits them to have a desert somewhere else.