There are a chain of islands called Io's Blood Island Chain. These islands represent all major climates. It is separated from the rest of its world by very large oceans.
The dragons on the islands are described as having a loose democratic government with a caretaker. Each dragon clan with a wyrm level dragon gets a vote on issues before the Council of Wyrms. The caretaker only gets a vote on tie issues. Thus dragonkind cooperates and makes decisions on issues affecting dragon welfare.
Humans are not native to the islands, and those humans who come to the islands are mostly adventurous dragon slayers
The Council of Wyrms, with representatives from each of the 15 branches of dragonkind, arbitrates major disagreements to keep minor skirmishes from developing into full-fledged dragon wars. While it is the Council's job to chart diplomatic courses through even the most turbulent waters of conflict, it also remains ever vigilant for signs of the dread human invaders who once almost destroyed the dragons of the isles. The player character dragons are born into this setting and must face the dangers and challenges of the isles and the seas around them.
Dragons rule the isles. They are the ultimate creatures, feared and respected because of their size, physical prowess, and magical abilities. They sit atop the food chain, barely acknowledging those beneath them. Still, the tests faced by the children of Io are legion, for no dragon hatches full grown and at the peak of its power. It must survive long enough to develop its strengths and abilities, to grow large, to gain the experience of passing centuries. For majesty might and magic, the dragons reign supreme.
Kindred work in cooperation with dragonkind. These demihumans, while not as long-lived as their dragon masters, can at least survive through more than a single dragon life stage. Kindred are not slaves. They freely acknowledge the superiority and majesty of dragonkind, and readily offer their services in exchange for leadership and protection. Just as a medieval vassal swears allegiance to a liege lord, a demihuman bonds with a particular dragon of her liege clan. These demihumans handle the tasks their lords cannot or will not do. There are simply times, circumstances and locations where a small, bipedal being is better suited to a task than is a massive dragon. Kindred fill a specific and honorable station in draconic society.
Half-dragons strive to rise above the prejudices and limitations of their station. Some find acceptance (or at least a place to dwell) among the more tolerant clans. Others run from hostile clans that hate the half-breeds beyond all sense or reason. In most cases, half-dragons are outcasts who wander the isles in search of ways to prove their worth to the dragons they fear, respect, love, and hate.