Notice the slight change in spelling. As I said for Darguun, I sometimes have some different takes on creatures than D&D; I go for a more traditional, Tolkienian "orcs and goblins" rather than "orcs vs goblinoids." I also completely eschew the alignment based split of demons and devils and yugoloths. To make this a little bit clearer, hopefully, that I'm not talking about demons in the "chaotic evil" sense, I used the British spelling. I know, I know—AD&D used to call yugoloths daemons. Even though it's pronounced exactly the same as demons. But they haven't been very consistent about that usage, so it's still a word that has a lot less D&D baggage than demons or devils does.
That out of the way, this section is quite seriously remixed compared to some. When you read it in the original Campaign Setting book, the first thing you're treated to is nearly an entire full page of text giving you ancient history of what sounds an awful lot like the Ymir mythology followed by the Gigantomachy, except subbing in various D&D creatures. None of this is relevant in Eberron Remixed, and if it's even going to be true, which I doubt, it'll never come up. Remember how earlier I mentioned that humans came originally to Khorvaire from Sarlona? Although in the Remixed version, there were already a completely different ethnicity of humans already here (the so-called Old Folk.) The kemlings, on the other hand, arrived in Khorvaire about the same time as the Sarlonan humans, but on the complete opposite side of the continent, in the area now known as the Daemon Wastes. They came from their homeland in the isles to the northeast of Sarlona called Ohr Kaluun, and crossed a completely different ocean. It would be equivalent to the Sarlonans being Western Europeans landing on the east coast of North America while Siberians were crossing into Alaska and the PNW at the same time. On the far northwestern edge of Khorvaire they founded the sister kingdom to Ohr Kaluun called Bael Turath.
The kemlings are supposedly demihumans with just a touch of daemonic blood in them, giving them their unique physical appearance and racial abilities. Perhaps this is literally true, and perhaps it isn't, but regardless, diabolists of various types were relatively common in Bael Turath and Ohr Kaluun, and sorcery was not illegal among them. Their rule was, as a result, often somewhat chaotic as having those with significant power go dangerously insane from time to time; not to mention the consorting with daemons, meant that the stability of their society was limited. There were peoples already living in the area when they arrived, the equally idolatrous yet much more savage Atlanteans fought with the kemlings for many years. And finally humans and others arrived in the area from the east and south. The history of the area and how Bael Turath fell is confused and fraught with a number of obviously false theories, conspiracy theories, and wild speculation, but fall it did, and in the process, the land was wracked with arcane storms, earthquakes, volcanic eruptions and other earth-shattering impacts that left much of it uninhabited and uninhabitable.
That said, in spite of this rather dramatically remixed backstory, the land itself isn't all that different than as described in the book. I don't have, nor am I interested in rakshasas, since I greatly prefer fantasy that is rooted in the folklore and mythology of Western civilization, not the Indian subcontinent. Some daemons do live here, but not nearly as many evil outsiders as posited in the book; mostly it's their demihuman, corrupted offspring, as well as savage tribes of Atlanteans and others that live in the area and project a stoic culture of containment on the evil of the Daemon Wastes. The land isn't quite as desolate and blasted as inferred in the setting book; much of it would be comparable to the Badlands of the Dakotas, for instance, and much of the rest of it would be classic mammoth steppes. That said, there are vast fields of twisted, hardened lava rocks like obsidian and basalt, cooled lava flows and rolling plains of grey volcanic ash over much of the area. The ruins of Bael Turath dot the landscape as well, including sometimes half buried in ashfall or hardened lava flows. Most of the inhabitants avoid these areas and consider them cursed, but considering how many people of evil disposition if not outright insane philosophies and personalities live in the area, you never know when you'll find some sorcerer searching for secrets of the past, or a gang of bandits or worse making shelter in these areas, in spite of the haunted nature that many of them clearly have.
A few other minor changes: the Carrion Tribes are mostly made up of the Atlanteans, with a few Old Folk humans and even a few half-Atlanteans (not treated as a unique race; don't get excited.) The Ghaash'kala, which are translated as Ghost Guardians, which is a name I like better, on the other hand are mostly human, although the specific mix of genetics that gave rise to them is a mystery; no doubt a little bit of Sarlonan, Old Folk, kemlings and maybe a little of some others here and there too, and they have a unique and exotic look to them; bronzed skin, brown hair, silver-chrome-colored eyes. They aren't as tall as some of the Northern nations like the Aundairans, Thranese or Karrns, but are taller than the more southerly nations like the Brelish of the coast or the southern Cyrans.
The kemlings, on the other hand, are less barbaric than either group in terms of their accoutrement and lifestyle, although they are nothing like what they were during the time of Bael Turath. In fact, many of them seem rather embarrassed if outsiders bring up that benighted realm, like they have something to live down. They are not very centralized, but live in fortified towns and villages in the more fertile parts of the steppes usually, herding reindeer, wisent, horses and saiga as well as growing what crops they can; often shrubby little things like huckleberries and very hardy grains. Those close enough to the coast also fish and hunt seals and walruses as well as the occasional whale. The reality is, though, that the kemling population has suffered a massive diaspora, and while they still make up a significant plurality in the region, they do not really control it. They barely even control themselves, and there are many individuals who quietly pick up and leave the town life either to join one of the barbarian tribes, if they can make themselves be accepted, or just leave the area altogether, looking for greener pastures elsewhere in Khorvaire. And the call of their blood occasionally means that an entire village, town or even larger area falls prey to the sway of some charismatic cult leader who leads them into strange evil practices.
A few other changes to the inhabitants; like I said, not having any rakshasas, the Lords of Dust will be actual daemons, as the name of the place implies. The fiendish overlords from the distant past are much greater than just about anything in the monster list; equivalents to Cthulhu himself, and would be apocalyptic if released, but most of the daemons in the monster list can have a place in the Daemon Wastes. Servitors and imps make up the vast majority here, of course, but succubae rule over them, and more powerful daemons like baal-rogs are the champions of the Lords of Dust. Others like typhons and nosoi tend to be more solitary and simply rage against whatever weaker creatures that they come across. There are no such things as night-hags, though in my rules—any need for any type of hag would be best accomplished by either making them female liches or even Heresiarchs; powerful undead or immortal witches who transcended their humanity in ages past. They aren't necessarily as overtly hostile as you may think, though—the Graeae of Greek mythology or the Norns of Norse mythology could be a good analog, which as in the case of Perseus needing a method to defeat the Kraken, means that occasionally the desperate will petition them for their knowledge or wisdom, although the cost is usually shockingly prohibitive.
Daemon Wastes population remixed
35% kemling
30% human
20% Atlantean
8% daemons
5% orcs and goblins
2% other