In my multi-edition campaign world, I go with the kitchen-sink/Mos Eisley approach. It's rare to find anything larger than a small village without multiple species living in it.
• Rakshasas rule over half the world. The big mystery is why they stopped their world conquest. Rakshasas are NPCs.
•...
They couldn't come up with a way to use the stench kow? I once created an adventure where stench kows were the hook, though unfortunately, the players never took the hook. In it, the stench kows were a kind of bovine tiefling that were ruining a farmer. The backstory was that a small planar tear...
The cosmology to homebrew I'm currently designing is specifically being made vague enough so that things from the Great Beyond or the Great Wheel can be added, though its origin story is quite different. The framework of the universe is based on duality, specifically Potential (Chaos) vs. Actual...
Perhaps it would be better to have dragon breath as 1/minute or 1/hour. This could simulate the 4th edition encounter power, and it keeps 10th level NPC dragonborn from using dragon breath three rounds in a row.