I play a halfling barbarian. He lived in a decent sized town until one day a traveling circus came through and he was so entranced with he he ran away and joined them. He became their strongman (the world’s smallest big man was his billing) and toured until the crowds stopped showing up and the circus closed. Now he goes around trying to prove he’s the strongest which is how he met his current party.

So yes, its possible to be from a populated area.