I could write an entire essay on that, but here’s the ‘short’ version:
First, demographics and geography.
The Thyatians are a small, small, minority in Karameikos. The country is vast, larger than modern-day France, and heavily forested. When the Thyatians arrived, they settled mainly along the coastlines and major rivers. There are Traladaran villages deep in the interior where people have never even seen a Thyatian, and for all intents and purposes, are hardly aware their land is "occupied."
Second, it depends who you ask.
Coexistence varies widely depending on social class, religious affiliation, and personal history. Traladara was only beginning to emerge from a long dark age when the Thyatians conquered it a few decades ago. The land was a patchwork of independent lords and free cities, with little trade or communication between them. Travel was dangerous, and people lived in isolated pockets. Over time, Traladaran nobles began to intermarry and consolidate lands, creating the foundation for a more unified realm, but it was still a bleak and harsh existence for the common man.
It’s an undisputed fact that the Thyatians dramatically improved security and prosperity for nearly everyone. They brought more advanced technology: metalworking, agriculture (heavy plows, crop rotation), architecture, watermills, engineering. Their system of government was more organized and efficient, with a uniform criminal code and taxation used to build roads, bridges, and forts to protect trade routes. They established schools and introduced literacy in the major cities—for all citizens. They explored wild regions, curtailed monster threats, and brought order to a lawless frontier. For most commoners, life is simply better, and they often don’t care whether their lord is Traladaran or Thyatian.
Of course, not everyone is happy. There are Traladaran patriots who yearn for self-rule. The Thyatian Church of Karameikos, zealous and proselytizing, is viewed with suspicion, especially by followers of the old Traladaran faith. The dispossessed Traladaran nobility still harbor resentment. Though they haven’t openly rebelled, they dream of the day the Thyatians vanish from their homeland.
As for the Thyatians:
The "old guard", those who came with the Duke, remain proudly Thyatian. And who can blame them? They hail from the greatest human empire in the world: vast, wealthy, orderly, and civilized. Nobles like Hans Bowell don’t assimilate. They believe Traladara should adopt Thyatian customs and religion, not the other way around. But the younger Thyatian generation, born in Karameikos, are different. They speak Traladaran, are more willing to embrace local culture, and form friendships across the divide. They’re the ones slowly blurring the line between occupier and native.
What happens at the end will be up to you.
Karameikos can become a cultural and religious hybrid, like Norman England. The Traladaran people can rise up and reclaim their land in a bloody revolt. Or maybe Thyatian culture and religion prevail, and the old ways will be all but forgotten and set aside?
And don’t forget, if ‘Halav’ is to be believed, a greater threat is stirring in the deep forests. One that hates all mankind, Traladaran and Thyatian alike.