An interesting city district could be one where halflings, dwarves and gnomes dwell - all the doors are four feet high, streets busy with merchandise as dwarves pound away in their workshops, halflings sew, cook and do carpentry jobs and gnomes tinker with magic and machinery. From the various dwellings, work-songs in foreign languages sound, tiny children run around frolicking and playing withj papa’s anvil, while a hundred inns offering specialities ‘just like home’ dot the place. The bridges are low too, and passages narrow, so all those agoraphobic dwarves feel comfortable. The dwarves build all walls sturdy of precisely hewn stone, while the halflings plant parks and paint the houses nicely.
This setting is unique in many ways - in an ordinary city, you turn a corner and seem to have grown, for all is diminutive. In all shops, there will be two sorts of wares - one for the small folks, one for the big ‘uns. Rowdy dwarvish inns might provide a place to brawl, or to get into lots of trouble by calling someone a lawn ornament, You can run afoul of a gnomish experiment gone awry, or try to chace a criminal ... on knees, as the low ceiling will not allow it otherwise. Of course, swinging a halberd, a greatsword or maul might b quite difficult in there! Not to mention the logistic difficulties of carrying a longbow!