http://www.d20reviews.com/Daemonforge/standardrace.htm
"Once the varied races and nations of the world lived apart from each other, each race and culture retaining its uniqueness, due to cultural, political and geographical reasons. There were varied human nations and many tongues and customs existed, and though the other races were far more homogenous even the exhibited differences. All this changed when the heavens and hells turned the world into a battlefield and the mortal masses were forced to take refuge in distant lands behind the Fingers Of Darkness.
Humans were once found in every corner of the world and they had always held dominion over the Kessel-region, which lay to the east of the Fingers Of Darkness. The human inhabitants of this region were first reluctant to allow other humans, belonging to foreign nations and alien cultures, to enter their land and even less so if the refugees were not of human stock. Eventually a great human lord saw the folly in this as the destruction of the other races would surely only hasten the fall of the human nations. By his design and will the other races were allowed to take refuge in the Kessel, and made to work together as one to fend of the fiendish threat.
Behind the massive natural barrier of the Fingers Of Darkness, covered as it is by the alien mist, they began to build a new civilisation. As centuries past by cultural taboos began to break down, as there were no great barriers between the mortals, no mountain or river, no strife or prejudice endured the fiendish siege. Slowly they began to see themselves, not as men, dwarfs, elves or whatever else they had once chosen to call themselves, but as people. One people. More and more half-breeds began to appear as people married across racial divides and soon the term half-breed became obsolete as the so called pure-blood became rarer than those of a diverse heritage. Those pure-bloods that remain tend to belong to long-lived races, such as the elves, who still retain a separate culture among the seas of the endless ocean. Truly most people are mostly still human, but with the blood of many diverse races flowing in their veins, and while quite many claim to be of pure blood such claims bear little meaning to common folk. "
This is the current text for the races.
You could place a really pure-blood empire in the isles though, as its where the separatists hang out, ie Garam´Shar (orcs) and the elves of the Endless Ocean.
You could have one or a few exceptions to the rule, but they should stay exceptions and with a clear statement about their uniqueness...