Once, the gnomes controlled a vast (if sparsely populated) territory in the East of the world. This ceased to be the case when the Meraluk Imperium swarmed North, looking to conquer better lands for their peoples. The gnomes who survived fled to the Elves and Dwarves, integrating into their societies as second-class citizens.
The gnomes lived in a dozen cities and hundreds of small villages in their woods, plains, and hills, with countless scattered burrows in the far Eastern jungles. A monarchy ruled from The Lonely Tower, which also housed the sole gnomish University. While the existence of a monarch implies a united people, in truth this was mostly a central economic system. Politically, every settlement and, to some extent, every gnomish household was independent. Laws varied from place to place and time to time, with the various areas at best linked into a loose confederacy. As a result, when the Meraluk came there was only a fractured and disorganized response.
When the Meraluk approached the Lonely Tower, the magicians who lived their combined their powers to unleash a devestating blast of raw magic. Thousands of Meraluk were vaporized instantly, and the land for miles around was blasted into a barren wasteland. The explosion cost the lives of the magicians, as well as the gnomish royals, who sacrificed themselves to empower the spell.
Today, the only real gnomish settlement left is the Lonely Tower, reduced to a Guild University without a monarch or people to rule over. They have twelve Seats; magicians representing expertise in a particular area of spellcasting. When in council these Seats sit on ancient stools, which are the symbol of the University and its token. The barrens around the Tower are tragic but useful, making it impossible for a Meraluk force to approach without being seen and blasted to atoms.
Unknown to most of the world, there are still "feral" gnomes occupying the Eastern jungles. These gnomes live in family groups or small clans, and never divided into Rock and Forest gnomes like their wandering cousins. A few of the gnomish diaspora have learned this, and fantasize about re-establishing a gnomish kingdom in these wild lands.