Keep 'em separated
One of the tropes of D&D, and fantasy RPGs generally, that I've come to dislike the most is the cosmopolitan society depicted in so many settings and adventure modules. It's arguably reached its apotheosis in modern iterations of Dungeons & Dragons and its close kin, in which not only dwarves, elves, and halflings, but orcs, lizardfolk, elemental-kin, half-demons, and even more outlandish beings regularly coexist closely with humans and each other, socializing, working, cohabitating, even interbreeding freely. Even in older products, as well as more recent OSR and OSR-adjacent material, however, the trope is in evidence. Try to think of the last human village or stronghold described in an old TSR or newer OSR product which actually featured a human smith instead of a dwarf. Setting aside that most wildly overused cliche, though, you'll generally find that almost every predominantly human settlement will have enclaves of non-humans, and NPCs prominent enough to warr