If you want to use the main landmass, then you build in the Tamriel worldspace. Making a new world space with Tamriel parented will simply use things like LOD data (at least that's what it did back in oblivion. Didn't tinker much with this). Other then that, making a new world space is very much possible.
Except I am planning a MAJOR battle, and would prefer to implement it in a separate worldspace that inherits the terrain so I don't interfere with anything else in that area (Not to mention it's close to the world border, and if I make a separate worldspace with inherited terrain, I can have troops in the nearby region that the player wouldn't normally be able to enter (Not far into it, but at least 50 yards or so)