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There's a game called Warlord Battlecry (1, 2). It's very similar to Heroes (not in terms of gameplay, but in terms of creatures: the same dwarves, orcs, minotaurs, unicorns, fairies, etc. - a typical set). In that game, there's a race - dark dwarves, or something like that - whose development is technological in nature: cannons, howitzers, and other weapons. In that game, they fit into the plot perfectly.
And in Heroes 3, it could be the same.
I think the problem with the fans' outrage was something else: look at the screenshots: they use the creatures that we all love, and some jerks are conducting experiments on them, and that already smells bad. As an ordinary fan, I would immediately start complaining, why did they pervert the races, come up with all sorts of things, it's unpleasant to look at.
The developers should have come up with different appearances for the creatures. As an example, there's a faction whose appearance I actually welcomed with great joy.
And one more point: plasma cannons and proton torpedoes with space carriers are unnecessary. They should have raised the level of technological development slightly above the other cities, but at the same time, perhaps remove some of the magic (or limit it). For example, let them have ordinary cannons that fire cannonballs, mortars, etc. In short, no further than the gunpowder age.