Unless the land has been peaceful for a long time, in which case spreading out to protect against fires would make sense. Medieval cities had a lot of problems related to their crowding; if spreading out were a practical option, it would be worthwhile. Also, it looks like security isn't their big concern... most of the buildings are outside what walls there are and density is even less inside the walls. Which would fit if the walls were essentially symbolic and placed around the "official" buildings of government, religion, and whatever other powers might be in place.