Most MMO's feature strict cultural/racial diversity. If you are for example playing in team X, you will rarely see any races from team Y. I am personally against this to a realistic level. In Elder Scrolls, you may visit Whiterun, but there will still be a few outlanders in the town. I feel like this adds more immersion to the game and not just the same old Nords everywhere. I hope they don't have only Dark Elves, Nords and Argonians in the Ebonheart Pact areas. Although they should be the majority, I still feel like a small percentage of the citizens could be from other races.

An example of this is from previous games like Morrowind, Oblivion and Skyrim.

I'm pretty sure you will nothing to worry about on that. The past TES games have done pretty well about making each area you visit pretty diverse and I believe ZOS won't have a problem keeping to that.

While players will only be able to pick those races that conform to a faction, there will be NPCs of any race spread throughout Tamriel. An example of this is an Argonian that you see in Stros M'kai.

I dont have an official source on this but don't worry, there will be people of the "wrong" races in the "wrong" provinces.

edit:

that's the example I was thinking of

You worry too much, this game WILL be TES and have the same feeling as the single player games...at least from what i have seen and heard!