In short. I've written about it before, but just in case.
It would be possible to add alternative creature buildings. That is, make it so that you can choose which creatures to recruit in a city, say elves or some kind of space goblins (it doesn't really matter). Or even build a combination of these two races. This is the closest thing to creating a new race that can already be done without messing with the game's executable file.
What will work:
1 New heroes and creatures for recruitment in the Castle, without replacing the old ones (you still have to choose one or the other, but you can select a different set of creatures in different cities.)
2 Different visual representation of different dwellings and parts of other buildings in the city window. Different visual representation on the map of cities with different buildings.
3 Dwellings that can be rebuilt (functionally and visually) on the map. That is, if you are recruiting space goblins in a city, then you probably want to recruit goblins from the building on the map as well; the player should be given this opportunity.
4 The "new" alternative faction's creatures can have a new separate symbol that distinguishes them from the base faction's creatures on the map (I mean the rotating circle). It's a small detail, but it's important and nice.
What cannot be implemented
(or at least I don't know how):
1 Make a different text label for cities with different buildings. That is, the city will still have the type "Sylvan". The same problem exists with the city icon. The same problem exists with displaying the city in the quick menu.
All of this can actually be renamed/replaced with something more neutral, suitable for both factions.
The same problem exists with the text designation of creature cities, although they can be designated as neutrals, for example.
2 You can't add an alternative siege scene (most likely this is possible, but it's very, very, very tedious and won't work in Multiplayer)
3 A new alternative racial skill for the city. No one forbids using the old skill. (although there may be glitches with "retraining")
Known bugs or unexplored aspects:
1 When building some buildings, you will have to exit the city menu and go back in so that the effect takes place. (this can be warned to the player with yellow text in the description of a specific building)
2 It is unclear how the AI will behave with such a structure of buildings. Perhaps there will be no problems at all, or perhaps it will start acting stupidly and building nonsense/not building anything. Tests are needed.
Overall, I think this is a quite viable option. The bugs and drawbacks are not critical, in my opinion. Unless, of course, the AI goes crazy.
Here is a post with a detailed description of the mechanics of the idea:
/topic/at/1009839/All you need to implement this is average scripting skills and knowledge of the game's internal file structure. If anyone is interested, feel free to use it.
That's about it.
I personally won't do it, because I don't want to create a city of ugly, crooked monsters in the style of Polish mods. And to make a city of normal, high-quality creatures, you need a lot of time and effort (do you want it done well? It will take somewhere between half a year and a year, at best).
I am not ready (and simply cannot afford) to spend money on this now. Especially considering that in return, there will most likely be nothing but stress. Sorry.