> The biggest thing is that in D&D most of population lives in towns & cities, and there are very few if any villages.
In my experience most D&D settlements have to fit onto a two-page spread in a letter/legal sized book. So they've got space for an inn, a store, and maybe one or two places with things to advance the plot.
A realistic town might need 300 houses for each inn, but there just ain't the space on the page.
Villages are smaller so they are easier to generate and fit on a page than towns. But people design based on what they experience (in games and in real-life). So most adventures take place in towns or in the wilderness. Americans probably never seen a village.
> A realistic town might need 300 houses for each inn
300 houses in one place is already a big city in dark ages. Let's say 2 stories with 2 families on each level, with 5 people in each family - that's 20*300 = 6000 people.
6000 people would probably be top 10 city in a kingdom in 1300. Rome was 25 000 people back then.
And inns were mostly for travellers, so the number of houses weren't that important - it mattered if you are integer number of days of travel from the last trade center.
Honestly I just took the present day number of houses in the UK (30 million or so) and divided by the number of pubs in the UK (46,800 or so) which gave 641 houses per pub, then I knocked that down to 300 lest people think I was over-estimating the number of houses.
Of course, that present day number is 30 million houses for 67 million population, i.e. 2.2 people per house - not the 20 people per house from your assumptions.
Without some of that the game would be unplayable or at least highly constrained.
A 2 week ride on horseback would be a reasonable trip in that milieu but has to be compressed somehow; at best the group could meet and game out some encounters during that time period but that takes dedication, and if that was the way you rolled you’d also put them in a conference room for a long weekend to play the dungeon.
And largely due to game play. Lot could be scaled down to present enough generic npcs and buildings, but having to spend time traveling through same town for 5, 10, 30 minutes or more each time is not exactly fun. Or takes special kind of player. I am not saying there is not fans of that level of realism, but it is not big niche.
In my experience most D&D settlements have to fit onto a two-page spread in a letter/legal sized book. So they've got space for an inn, a store, and maybe one or two places with things to advance the plot.
A realistic town might need 300 houses for each inn, but there just ain't the space on the page.