France has an extraordinarily low population density and survived on a similar system until 1789, during which certain events took place with which you may be familiar. =]
You're looking at this from a modern economic perspective, and that's... not the way to do it, frankly. You don't need a lot of population centres to work under manorial economics, just villages interspersed with market towns. Big cities around a palace take a lot of money, so of course there's going to be trade. Also, don't knock cattle and sheep. Livestock's one of the biggest and most powerful trade exports in medieval Europe, which I admit to basing this off. As for sheep, well, the history of the Woolsack should be enough reason why they're important, but England wasn't the only place where this was true; broadcloth trade was huge in medieval Europe, centred around Flanders and Leiden. Sheep are also good because they can be grazed in places where arable farming ain't viable, which is why rural Wales has a, er, reputation in that regard.
(also fyi in 1938 they rebuilt the woolsack with wool from all over the commonwealth and brushed under the carpet the fact that previously it'd been stuffed with horsehair and avoid a national scandal)
Also, Commonwealth or not, Wechi's still more than likely going to be operating on a manorial basis, simply because they're land rich. Mei'n Payj is probably going to support some trade, but a lot of it? Farmable. Hence the manorial system.
Iric, well, again, look at France. Vast tracts of land, haha, and most of it good for farming, especially near La Wunj. River landscapes often are. France is a good analogy, actually, because La Wunj is like Paris - wide rivers suitable for trade barges and it's on the Nechsiv route to the sea. If there was a better port at the mouth of the Nechsiv, it'd be the main city, but it's not. It's obvious that La Wunj, while possibly a little faded, is still an incredibly wealthy city with trade effectively by appointment. Therefore, it's being supported by the rest of the Barony Dann and other bits in the Republic.
Ozerborrd, I can't really tell that much about except that if Skypcht wasn't a thing, you'd be a lot poorer than everyone else in Konti-nyuum. Hill farming's the order of the day here, which means more sheep, but you don't have any water links to the rest of the island, which means no river trade for you - and that means you have to rely on mountain passes for trade, which must be a barrel of laughs.
I accept that this is total conjecture on my part, but it's at least reasonably informed conjecture. And you still get urbanization in areas where there's a low population density - look at Paris. Last time, I promise. The surrounding countryside is, er, countryside. French peasant folk, their livestock, and, er, not much of anything else. You've got the land. You've got people working it. You've got towns and villages and hamlets and everything else you covered in Geography class. Yes, they're probably small, but they're there, and they deserve more than just being to be ignored while the nobles plot their latest raid.
I also admit that I'm basing this on the real world, and you've got a clockpunk Laputa hanging over Des's little enclave, so I might be barking up the wrong tree a bit. =]
