I think they should both be in and earth magic just is both. To leave magic out while that is such a huge thing in dominions would basicly mean we make a different dominions with less options. I think magic should not be evil or good, but just as in dominions a tool.
I don't know if your (DW) question was also a reply on my explanation about the nations but I'll explain how I thought of magic when creating them at least.
Since Ulm always was more Iron and stuff and less resources I just try to make them look like they invented spaceflight and weapon like "we" on this earth have and they just use magic beside it and to create the same things we do now.
I figured Jomon can't do that yet but that they enhance simpler machines with magic etc so they can fly too and have simpler weapons but enchanted n stuff so they can have powerfull elemental weapons.
What the aliens and R'lyeh exactly use I don't really care.. probably something in between
I think that most nations could have earth or something/earth spells to create spacecraft that aren't recruitable if the nation should have them (like Ulm)
I personally think earth magic should be very prominent in the game since it really reflects building spaceship best.. I think most races should have access to earth magic so that race can have a summoning spell for spaceship/or other things like tanks and whatnot if we want them to have one. I also think this should need to be very powerfull earth magic (most case earth 1 would be enough and then the spell could have other paths) else everyone will be throwing bladewinds etc

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