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Verkarth certainly stands out from its neighboring settlements, architecturally and culturally. Though there are touches of Redguard influence here and there, the icons of its Imperial liberators dominate the city. Its bones, however, are far older—much like the Ayleid settlements the Empire conquered. The stone that lines the walls of the city, the villas of the nobility, and the castle at its heart are all uniquely Verkarth. Both elegant and menacing, not unlike the stonework of ancient Daedric ruins, but more refined.
Unsurprisingly, the locals are suspicious of outsiders, so I kept my ties to the nobility of High Rock closely guarded—something I had to remind my idiot manservant of with repeated blows to the head. They were also none-too-helpful on the subject of the heretical monsters who once ruled over their ancestors, other than to sing the praises of the Empress whose countenance graces the main square. I did have much greater success with the thriving underworld lurking beneath Verkarth. After I convinced them to return the supplies I had foolishly entrusted to my good-for-nothing manservant.
The local outlaws had made refuge in a sprawling undercity that might well overshadow what lies above ground. These vast corridors intersect with the oldest buildings in Verkarth, providing these thieves with easy access and egress from the surface, which explains how they have managed to thrive in such an unforgiving home of justice. Unfortunately, much of this undercity has been looted in the time since the original occupants were driven out, but a few of these vagrants have kept some of the less shiny relics in hopes of selling them to people like me. Uncharacteristically wise.
Of particular interest was a bundle of scrolls written in what appears to be a dialect of Daedric. My translations are still partial at the time of this writing, but these documents are clearly Gray Host in origin and range from personal messages, to orders, to matters of state. They indicate that Verkarth was not ruled entirely by their monarch, but by a Gray Council that predated the founding of the city itself. The members of this council were not all in agreement over the course of their budding kingdom, it seems. While I cannot put a definitive date to the founding of the city yet, evidence suggests that Verkarth City did not spring up overnight, as the Pyre Watch suggests. It had long thrived underground before expanding onto the surface. If you can imagine the speed at which a legion of vampires and werewolves could work, then the idea that the city came into existence before their neighbors had noticed doesn't seem entirely unreasonable.
My best guess is that the home of the Gray Host was established nearly a hundred years before it "appeared" to the outside world. How the Gray Council that founded the city came to be there, I do not know, but there are collapsed tunnels and causeways that suggest that this subterranean city was not in isolation. As ominous a note as that is to end upon, I must forestall any further delving until my wishy-washy manservant overcomes an advanced bout of brown rot. To be fair, I might have noticed his condition sooner if he didn't always smell of a latrine without a liberal application of cologne.
I leave you with this final bit of wisdom: something buried is not something gone. Let us hope this doesn't prove true of the Gray Host.