I decided to download Warlords of the North and take a look at this feature.
In the very first generation (see the screenshot), it generated a Goblin camp with 1 Azure Dragon. I've never seen Azure Dragons in Shades of Darkness; there were Rusty, Crystal, and Mythical ones, but no Azure ones.
So, is the generator/standard templates in Warlords of the North different from Shades of Darkness?
And Azure Dragons do exist, but I haven't seen them in online games either.