That sounds about right.
"Hey, we accidentally killed that village of peasants over there. Heres a fair weregild"
*Dumps gold bars*
You know...I suspect the Highlanders might not put quite the same value on the lives of their minor villages as we do...we'd fight to the death as an entire country to protect a province consisting of two towns. The lowlands, not so much.
Uh....I'd be even more alarmed if it worked like that because boy is it a great way to go to the big city to game your clan status...much like was being done with clan adoption here. Enter the city, lose your clan, then go out and get adopted by any clan.