Check out any small village 50 years after a nearby gold rush. That is what happened to Aleroth when the war with the Black Ring created a great demand for healing potions, and made Aleroth a strategic target in need of protection.
Even in Beyond Divinity swamp was encroaching on the farmlands in Ferol, so Aleroth being surrounded by water isn't unreasonable even without the topography changing magic unleashed during the war.
