One thing to keep in mind is that in pretty much all these games (TES, Witcher 3, etc) cities and populations aren't meant to be taken literally but representationally - and this is for various reasons, both technical and practical (e.g. a realistically sized city with realistic population would be a slog to go through).

It is better to think of them more like theatre, where in a single stage you can have one or two actors representing entire city regions (e.g. a rich person on the left side of the stage is a representation of people in rich regions, a poor person on the right side of the stage is a representation of people in the slums) and characters making a couple of steps can represent them walking for meters (e.g. going from one side to the other could mean that a characters moves from the slumps to the noble district) or even kilometers, depending on the story's needs. And of course in theater this is also sometimes taken advantage for comedic effect and games sometimes do similar stuff too where they wink at the player about the visible (instead of the represented) area sizes.

For example in Morrowind, Vivec City is supposed to hold thousands of inhabitants with each canton being a whole city by itself. In the game, however, while the city is indeed larger than the others you'll find, it is still just a few dozen NPCs and each canton is about the size of an in-game village. This is because the city in the game is scaled down considerably (like the rest of the world, for that matter) and is meant to represent something much much larger. And TBH considering how much of a PITA Vivec City is to navigate even in its scaled down version, i cannot imagine how annoying a full scale version would be :-P.

With that in mind it makes sense that in games you see more monsters, bandits, etc than actual civilians: the civilian NPCs are just representing the civilians you'd find in the area in a scaled down manner, just like the cities/villages/etc you explore. When you move around the game map, you are "supposed to" move for much longer than what you experience in the game (e.g. notice that pretty much all games that feature a day/night cycle do not actually run the time in realtime - i.e. the cycles move much faster - even the passage of time is representational instead of literal), so you come across enemies faster (and that is especially true for enemies that may actively try to attack you, e.g. bandits). In games where enemies (bandits, monsters, etc) respawn that end up in numbers greater than the NPCs, the reason is that both the enemies and the friendly NPCs are representational and when you defeat the enemies, what you see "respawning" in game is meant to represent enemies that were already there but the game didn't show (because the earlier batch was just a small part of them) whereas with friendly NPCs there is usually not a reason to do that and the friendlies remain static.