Actually, whether they were based on electricity or ancient magic, it doesn't really matter.
Technology is simply a means to turn a raw source of energy into something different, more useful and more usable. What that power source is doesn't matter.
Dwarver automatons use soul gems as a power source. In that sense, they're no different than your battery-powered rl mobile phone. The only difference is, in our world we study every last detail of something before we put it into our technology. And that is the biggest difference between magic and science: in science, we have a full understanding of the laws that govern whatever we use. In magic, one uses it by simply understanding the laws of how the end results are determined, but not how it actually works.
To someone having no idea of the laws of physics, the electricity coming out of a battery would be no different than the power pouring out of a soul gem...
So, the evolusion of technology and magic are not mutually exclusive: magic can be used as the power source to fuel devices that would make it possible to do things that magic by itself could not... For example: television! Sure, who needs it when we have mages that are experts in projecting images, right? WRONG! Projection magic might be enough for establishing contact between a few people, but there's no way it could pull out something as complex as, say, a live transmision of the Tamriel Champions League Final (or whatever sport actually exists in Tamriel, lol) in every household across the continent... yeah, you might say there's no real reason to make such a technology in Tamriel... yet, somehow someone made it here on Earth, even though we didn't really need it either...
Or even warfare... sure, you might argue that magic as is can be more than enough in war... however, the Dwarven Centurions -which are only powered by a couple soul gems mind you- would disagree, and would be eager to show you what they could do against an army of mages... magic is nice, but magic chanelled appropriately through technology is a few steps ahead...
The only reason that Tamriel, which has been stuck in the Middle Ages for so long - idk much about the lore, but I believe it's about one millenium from the little I've read - hasn't advanced, is imho because it's just a small continent remote from the rest of the world... the only thing outside it that they know of is what, just Akavir... the rl world went from middle ages to modern-ish in just a few centuries, because there were so many different, equally big and cultivated countries and civilisations present at that time in Europe, that helped in collecting and utilising all the accumulated information. While ancient civilistations like Egypt or Mesopotamia took many millenia to reach the same amount of progress, because they were more or less left with themselves all of that time...
BTW, there are many RPGs who feature worlds whith both cutting-edge tech and magicusers and divine beings - most notable of which, the Final Fantasy series.

