Kilmore said:
... nobody's wanting to say what the difference is between people of african, east asian and european ancestory, much less any differences that exist between two relatively close ethnic groups such as the Pashtu and the Urdu.
Probably because, as far as I know, there are no pronounced overall physical differences between real world races beyond the tendency to be prone to/resistant to certain diseases or conditions as a result of genetic drift caused by relative isolation way, way back when. In other words, a difference so subtle that it's not worth bothering with in game terms (can't think of a game right off the bat, save perhaps GURPS with it's 'quirk' level disads, where differences that fine can be quantified with any degree of accuracy).
If you're talking cultural differences, like (for instance) 'Chandians are an outgoing people' or 'Every mage from Pardu seems to be an Evoker', look at the way the Forgotten Realms or Dusk handle this: through Regional Feats. Thus, people from the Chandian Basin can take the Chandian Regional Feat, which grants them a +1 to Diplomacy and Bluff checks. The great magical college of Pardu has more Evokers than anything else, so mages that choose the Pardu Regional Feat get an additional +1 DC to saves made with their Evocation magics.
Making things like that a Regional Feat mean that (1) you're not lockstepping everyone from Chandia into being outgoing and (2) it accounts for people that move somewhere and stay long enough to absorb that culture.
Another means of creating difference within an apparently homogenous culture is to have one culture absorb or surround another, so that assimilation occurs or is resisted. When assimilation occurs but is not yet complete (Chandia went on a spree of conquest under the previous King and took over the Pardu homelands a hundred years or so ago) then you might have a people that can choose between Regional Feats.
Where assimilation is resisted (Chandia took over the great city state of Ur-Pardu 100 years ago; now most Chandian cities have a Parduan Enclave) for whatever means, then you just have two separate cultures occupying the same land: they will retain their own regional feats, but it will be easier for adventurers to learn them. (Wys was raised in a Chandian noble house, but his nurse when he was young was from the Parduan section of town; later on in life he decides to take the Parduan regional feat when he gains a Wizard level).
Another way of creating difference is through the use of philosophical systems that are so different that the parties in question have a great deal of difficulty making themselves underrstood to the other.
In my Greatwood campaign, cultural conflict between the Imperials and the Hill People is one of the central themes. Most Imperials are raised in a culture that reveres a set of mostly Lawful gods. The Hill People revere nature, and follow a Druidic outlook. The two have virtually no basis for communications between them: issues that are vitally important to the Imperials (the state of the soul, the nature of the afterlife and how you get there) have no meaning to the Hill People (they all know they will reincarnate and come back again and again; the idea of leaving the world and spending eternity somewhere else is completely alien to them; they don't even have a word in their language that means 'die' in the sense that you and I in the real world understand that concept).
