If it's a (fantasy) medieval setting, there's simply no way the NPCs/people wouldn't be continuously warring. That's just how it was all over the world in reality as well during those times. Momonga doesn't actually seem like an evil fellow, so once he really starts to think of the NPCs as real living beings, it might be hard for him to have them killed in great numbers. I suppose there might be ways to avoid that, but since he's the Overlord of monsters, I don't think it would be easy. He needs to at least defeat the armies he's immediately facing if he plans to expand his influence. Would any human/elf settlements be willing to live under the rule of a Skeletor and his court of monsters, though?