200,000 is a very large city. At the very least it's more than enough to be considered a metropolis.
Rome is an exception that broke an empire and London doesn't take off till a long while out of the population dynamics we are discussing.
Mind you can always end up with someplace like the Valley of Mexico, but that practically was a magical event.
And it's not like Sharn is really set up to be a population dump, it strikes me as more the very high-powered working sort of city with a crazy class system that you need to have come through every once in a while.
I've always assumed the following for most fantasy models:
Almost non-existant frontier style rural settlement. If you run into the lone cabin in the wilderness the person in it will assuredly be a bad ass or a protected holy hermit. But it's the sort of lifestyle you afford rather than choose.
Fewer but larger village style settlements. Defense is just harder you're going to want to optimize that, reduce the scope of the transportation network, and exploit your ability to get more crops from a reduced area.
Urban areas are far more stable and cool and complex, but they also don't get that large. Magic can keep the operation going, but it doesn't really need labor and urban markets don't seem to be something it's optimized for.
I assume most of the population is either going to be in areas immediately surrounding these towns, ala the happy valley style phenomena, actually spread around encastellations or pretty well developed polises ala the developmental periods of Greek and Roman history, gathered around or into the castles of various higher powers or...
...organized into various alternative lifestyles.
Nomadism is awesome. If magic were arround to boost it up so that you could have a far more powerful mobile infrastructure you would do it.
Living in magic elf trees is probably also very pleasant.
Thing is I see lots of people choosing to live and fighting to defend those lifestyles and none of them being as prone to population growth or density as the rural agricultural stuff we're used to looking at.
I mean, heck, if I could get heal disease on my side as well as some bad assed local champions, I'd drop way beyond nomad to hunter gatherer.
Ya work less, ya develop cool languages and awesome games, and you're generally happier.
Civilization is pretty much a sucker's bet cept that it takes everyone else in child production, can really spruce up a river valley, and is pretty competitive in a fight. Magic evens out some of those scores and I don't why cities would be that popular afterwards.
C'mon, you have to be crazy, desperate, or rich to want to live in Sharn. If magic really makes life generally easier than there's less desperation and that just leaves you with crazy and rich.