The following was my answer to a request "how good is Dragon Warriors" on Myth Weavers. I think it's interesting enough to put here for those of you not frequenting this forum.
Legend undeniably a more gritty setting than most fantasy RPGs present (I refer to the majority of settings as "extra sugar added"). Roughly, think The First Crusade, except for some anachronisms, like plate armour existing already.
The take on the supernatural is also more folkloric. You could be an elf or dwarf, if you rolled just right (not much point in a halfling, you'd never progress past 3rd rank). It's quite likely nobody has seen an elf in living memory, though, so you're still a mysterious figure. (Though the author actually stated on his blog making non-humans playable was a mistake, and I agree heartily - in fact, the game would have only gained from excluding all magic classes or making them NPC-only, IMO).
As much as I can tell from reading the author's blog ( http://fabledlands.blogspot.com/ ), the intent was that non-humans don't have societies and don't follow our logic - or at least shouldn't, really, unless we mean normal or changed-by-magic but still normal beasts. But most aren't that, or shouldn't (the occasional Giant-created-by-ambitious-sorcerer is fine). These are familiar to anyone playing FRPGs, though.
The rest of them are more interesting. Theirs is the myth-logic, dream-logic like the Fair Folk in Exalted (though Dragon Warriors actually has a better system, which is doubly funny). The ghosts exemplify that best: they're not wailing on your door because they care whether you'd die soon. They're wailing on your door because they see Death approaching, and last they did, it came for them, then for their loved ones, and now it reminds them of those events of 100 years past nobody alive remembers. But there's a reason this ruin of a castle had remained a ruin! The souls of innocents want vengeance. And one night each year, they can get it. This night is approaching...
Or it could be a different reason. Depends on what has happened, not on what your standing among mortals is, but how much your personal circumstances follow the old story plaguing the ghost. (Ok - that's my take on ghosts, not necessarily the one in the book! The following is, however, strictly by-the-books by Serpent King).
In legend, even goblins aren't 1/2 HD monsters attacking you with rusty swords. They attack you with stealth, sorcery, sharp flying pieces of flint, and swords made of icicles. But if you capture them, they'd give you an oath to pay for their freedom, which they will carry to the letter. And woe to you if the letter of the contract allows them to read it to your detriment, because they will.
Hobgoblins add to that arsenal nets of spidersilk, and poisonous puffballs, the ability to make food in your pack rot, and turn your water into stale muck. They're summoning gusts of icy wind, turning the ground slippery with ice, and summoning packs of bats to attack you. These are the ones that aren't sorcerers, by the way.
Don't think "how do humans survive against such enemies", I made that mistake. They're not a neighbouring kingdom hiding in your forest! They're literally everything people are afraid of in the winter forest.
Similarly, orcs aren't barbarians that live somewhere. They're the barbarians that come in your village, grab anyone who didn't hide behind walls, and breach weak defences or retreat. They're, in a very politically incorrect way, the Other - but they're the Inimical Other that you really must be afraid of. They're the reason people are afraid of armed strangers!
Follow the dream-myth logic and it will bring you success. In fact, I'd give the same advice for the magic in Pendragon. Both games have their basis in myth, legend, superstitions, folk beliefs and oral tradition. Story trumps all, but it's not the GM's story I mean here. It's the story storytellers of ages past would be telling around fires in the dark nights while the wind is howling outside, seeking a way to enter the house and freeze you to death. Wolves are roaming under the walls of your castle, and being thrown out might be death sentence.
What stories would you tell if you were this storyteller? Tell them for Dragon Warriors. They're happening to the main characters, the PCs!
Now, I'm not saying this is well-explained in the new book. I'm not saying the system is perfect for it. I'm saying that in a way, it works great under that model, and the info in the Monster Compendium is enough for that. Just ignore the attempts at explaining where goblins are coming from...they're coming from the Forest. Doesn't matter where you live, it's the Forest. There's only one forest in the world, and it's the Forest. The humans name them differently for their own comfort.
You can bargain with fey creatures, of course. That's why there's an Elven King, and a Gnome King - or Gnome Chieftain, whatever seems right to the group. But these aren't mortal rulers. Going to their realm is literally stepping in another realm, and etiquette, good manners, a strong but compassionate heart and not giving your word lightly, and being careful with your phrasing will keep you alive better than any sword or spell.
So yeah, you can say it's a good, more folkloric setting. Or it might be just another oldschool setting. It really, really, really depends on you!