Precisely.
You want a village? Sure, have one.
You want another one? OK, here you go.
You'd want a castle? Why not, go ahead. Provided we have free ones.
A town? OK, but I'll name it (unless I don't feel like naming towns at that moment) and you can make the scene, plus an idea for a special quest about this town.

Every (settlement) donator will be included in the mod credits.
I believe that allowing players to make their own haven where they like it, the way they like it, is a good thing. Of course, no village-fortresses or crazily uncapturable castles allowed (with a few exceptions, if you like snow, cold and a particular mountain-inhabiting faction), but still, having your own village or a few? I think that'd be cool.
NB: This does not mean that I'll just put my legs on the table, sit back and enjoy the show. No, I'll give names to most places*, but I won't have time to make unique scenes. Maybe I should make a (VERY) high-res game map with all villages, towns and castles on it, so people can see which ones are free and which ones are taken.
* So you'd better act fast before someone else (me included) claims the village you would want!NB 2: Every name of a settlement
could (unlikely but possible) be used in my book**, therefore by naming the settlement you are agreeing for your creation to have a small chance of being included in the REAL thing!
** As a place that the main characters will pass by, or perhaps something more important.