There are no other towns in Broken Valley, but there is a bandit camp where you can do a couple quests (as long as you do not tell the commander the location and password to get in, so go there yourself first). You may be able to make it to the bandit camp at level 9, but the temple inside would be rather tough (save before entering, regardless). There are several individuals scatter around, as well.
Do everything else before the Paper Trail quest.
At the end of Maxos temple you can teleport to sentinel island (and back, until you reach a certain point, which you are warned about). You can mindread your first encounter there to gain a full level, so the higher level you are when you get there, the greater bonus experience points that will give you. Finishing Maxos temple almost brought me up to level 16, so I headed to the fjords to level first, rather than waste the mindread when I only needed 3k experience. I kept going, and managed to reach level 18 (for the last 4k experience, there were only level 21 imps available, which took a few tries to take out the first group).
Getting to level 18 certainly isn't required, but you are going to have to finish off everything in Broken Valley sooner or later, and it would be better to do it sooner.
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