Dryads Lair could have been the center of a great Bugbear Civilization, except for the humans that moved in and interfered. The humans could have turned this meeting of the Velikaya River and the Narva River, two of the great rivers of the world, into a thriving center of an empire except for the orcs and other humans that continually stalled any significant growth.
The land of the Halflings to the west seems to be ripe fruit to be plucked, except for a family of Silver Dragons that happened to guard the opposite side of the river.
For these reasons and other bad luck Dryads Lair remained a smaller town than would be expected on this peninsula. As the Kingdom of Terraguard expanded westward Dryads Lair made a good anchor point for the end of a large fertile civilized swath of land. The one thing that continued to bring humans back to this city was the Grand Celestry, the center of the Kayugan faith.