You don't need obvious superficial differences to make sides of conflict feel very different. Look at Dominions 3. It has huge variety of themes and units, yet vast majority of it is just humans. But this military uses only archaic weapons, obsidian swords, copper, feathers, hide shields, slingers. Those are black knights, effectively tin cans, slow and outlawing any use of magic. Many nations don't have any form of archery, or have only crossbows. Or no cavalry. Even within a single nation there's a big variety. If you recruit a mage (commander type), you don't know what his exact abilities will be. They have a common base, but many of them have special interest. So he may have 2 levels in Fire and 1 in Nature, but apart from that one of (Fire, Death, Nature) and one in 10 will have one of(Astral, Earth, Blood).
Too often fantasy games attempt to diversify races by the shape of ears (Start Trekism) or faces. Often no effort is put into culture, tradition, philosophy. Here in Poland, it is considered polite to eat everything on your dish. To show that you liked all of it. Over there in Asia, it is polite to leave a token piece on the dish. This is to show the host has given enough to satisfy everyone. Cultures can be very different and have bigger impact than technology. The Chinese had 800 years of leadership in ship technology and navigation, and they threw that away. They were not a colonial power because the faction of beaurocrats and court, lazy and risk-avoiding had nothing from long travels and trade. They were jealous, and when they won they outlawed production of big ships.