I dont think the number of towns should be determined exclusively by the size of the area. Bear in mind there are plague lands over the Northern mountains which may be a very good reason why the area could have become less populated. Another alternative is poverty and its effects which are often to cause people to migrate to urban centres resulting in urban sprawl and depopulation in rural areas. (This is something that happened in my own country in the 60s and 70s and is largely responsible for the depopulation of many areas.)

Airith, you may want have look at the rivers. At the moment they are slightly transparent and show the underlying land elevations. They may look better in the sens of standing out more, if you make them "flat" and independent of the land roughness. Another option is RobA's method of making a hidden layer with the rivers as black against a white background, then applying a gaussian blur to them. Then you use this layer as a bump map under your rivers. This creates the image of depressions through which the rivers run and can be very effective. Just an idea.

Torq