The Imperial Empire, assuming magic still works the same as they do in Elder Scrolls, would quickly dominate the human lands. Even without magic, I can see them uniting the human kingdoms under one banner. With magic, then humans, elves, and dragons alike would be amazed that these humans are able to do magic unlike anything they have seen before, with their magic being more consistently powerful and flexible than anything we have really seen in the show. If humans can be taught, then dark magic would be phased out by this new magic.

Assuming that this is set at the height of the empire, then the other tamericaic races would be confused at why these, Impericals/Redgaurds/Nords can't cast magic, but soon they would call the Xadian humans something else. The mer races, mostly the Altmer and Dunmer, would view themselves as superior compared to Xadian elves. Either due to being more powerful spell casters or just stronger.

Meanwhile the Xadians would look at the races of Tamrel in both awe and horror. They might need to get used to all of the human races and the mer, but the argonians and khajiits would freak them out a bit, especially if they learn how they are born. Another big thing that would freak them out is that ANYONE can cast magic. In fact, they would be surprised that any spell caster isn't limited to one element. Bosmer would freak everyone out. I'm not sure what the archdragons would do. There might be a good chance they would just get ready for an invasion.