The idiot mages get their sums wrong and trap themselves too, and more poetically, the prisoners revolt and take over, and rationally extract demands from the King in return for his precious ore. The humans need weapons, so seal off a prison mine behind a one-way magical barrier, and begin shoving convicts in. But instead of the war itself, Gothic is about some of its consequences. A succinct introduction describes a war between humans and orcs, because of course it does. The game itself is set within a microsociety built entirely on the situation its inhabitants find themselves in. Instead, Piranha Bytes recognised back in 2001 that a place is a place not because of its landscape or biome or buildings, but because the people there make it one. Its setting wasn't the singular underground world of Arx Fatalis, nor the varied alien landscape of Morrowind.
Gothic, by contrast, wasn't particularly pretty. We talk about worlds and locations and settings, but often these boil down to unusual geography or art direction – surface details and imagery rather than a real identity. One of the many nebulous concepts that spring up when writing about games is 'a sense of place'.