The world has no one government.  It is mostly a serries of city states, ruled by men, with small settlements in between.

Within the lands of Man, each city tends to worship a single God.  Other gods are tollerated (if they have similar interests), but the rituals and holdays always center around the local favorite.

The dwarves, on the other hand, have mainly formed two vast underground kingdoms.  The north dwarves, and the south dwarves.  While they often fight for mineral rights, territory claims over ruins of the once world spanning dwarven kingdom, and just because, they still view themselves as family when compared to the other races.

Gnomes have dwindled over the years, and now occupy just one small village.  Much of the race simply migrates from place to place, without a homeland of their own.  History has lost what once was known of it.

Halflings occupy 5 small shires in the NW hills of the main continent.  Each ruled by a sherrif, and elected yearly.  Recently one of the shires had the Sherriff's family murdered by the youngest son.  The reasons why are unkonwn, but the new sherriff is rumored to have ceased control through intimdation.  Since then, the other four shires have seen a rash of crimes cease them.

Elves, live in small cloisters, often hidden away from the other races.  Elven wanderers are not unheard of though.  They view all the world as their home, and feel at peace with most other races within it.