Good post, OP.
The setting changed. Troy Denning wrote his books, which overturned the setting as originally described by the Wanderer.
That said, I think that the Wanderer was writing his journal in good faith but it was highly speculative. For one, I believe that the Wanderer got it wrong about the wars between the city states. I think that the wars are mainly theatrical, similar to the wars in the novel 1984.
Even the Verdant Passage gets it wrong. In the Verdant Passage there is a reference to raids of Tyrian granaries by other city states. Thus the granaries are protected by a huge stone slab which are psionically moved into place whenever Tyr is attacked. By the end of the Prism Pentad you realize that those kinds of raids simply don’t happen.
Like you, I am a first boxed set originalist. The athas dot org templarate much prefers the Revised Campaign Setting. Therefore, I have proposed that Athas could have different histories.
Maybe Rajaat and Haflings were part of it. Maybe they weren’t. The point is that history on Athas is occulted. 98% of people on Athas know nothing of real history.
Don’t get me started on the demographics. The problem is that the staff at TSR didn’t understand demographics. Go with the fluff, and forget the numbers they provided.