So you guys know how the Legend of Zelda for the NES is supposed to be sorta a desert wasteland of a kingdom long past its golden age -- with Link to the Past serving as what the Kingdom once was?
I get the same feeling from Awakening, and Shadow Dragon/Mystery of the Emblem; but switched around.
I mean, think about it -- if you compare the maps of Ylisse and Archanea you'll notice that the shorelines are receding -- major climate change has gone on that's made the mostly lush environments of Gra and Altea into desert wastelands. The Kingdoms aren't quite so dense -- other than the City of Ylisstol and Plegia Castle, everything on Ylisse seems to just be towns and settlements. Even Valm doesn't seem nearly as populated as it was in the time of Fire Emblem Gaiden.
My theory as to why there seems to not be quite so many towns (other than development complications) is that the world is beginning to decline. It seems that for the most part, Gods have been mostly forgotten -- Mila, Duma and Ashunera decided to leave the world to the humans, Naga's been dead/dormant since even before Shadow Dragon, and the age of the Heroes of Marth, Sigurd and Alm's time has been relegated to myth -- the DLC shows that even Chrom and the Tactician aren't sure how accurate the Jugdrali sagas are, considering its been over 2000 years. So maybe, without divine intervention, the natural world is beginning to decay?
My other theory is that Ylisse is still undergoing reconstruction over the last time Grima was a threat -- about 1000 years previous. Considering his bones are strewn across the former island of Dolhr, he must have caused serious damage.
Walmart commands like a million dudes, though. And when they reference the other Valmese armies they mention they're in the hundred-thousands as well. That seems way larger than most FE games, especially the Tellius FE, which were the only other games in the series that acknowledged you actually weren't bringing down countries with 5 guys.
...or alternatively, we're putting way more thought into this than the devs ever did The game kinda doesn't make a lick of sense if you start thinking about the anime politics for more than a second.