I always thought that the concept of Droaam as a wastebasket where you throw all of the monsters that you don't know what else to do with was an iffy idea at best. That said, Droaam as a relatively savage land where barbarians, including some monsters have taken over and over-run and broken off from Breland who always really only claimed it in theory still works. As you see from the history section that leads off this section, it actually makes sense that during the Last War as resources were too constrained to make any attempt to defend it that the king evacuated the land, declared it quarantined, and a trio of witches swooped in and declared themselves the sovereign queens of the region. Albeit that is a sovereignty that no other nation officially recognizes, it has been accepted as a de facto state of affairs, and Breland has largely abandoned any attempt to press claims to the area other than occasional posturing and words from politicians.
However, most of the population of Droaam doesn't necessarily acknowledge or care what they declare themselves as, and they continue to live in their own tribal lands as normal. I'm changing the terrain of the area a bit; rather than barrens, I'm going to consider this as a massive, relatively high plateau. Thick and impenetrable forests cover much of the terrain, and open grassland/forest covers much of the rest of it. Canyons and cliffs and broken badlands, even when forested over, make for difficult travel, impossibility of agriculture, and other challenges that have conspired to leave the land feral and wild all along anyway.
Unlike as posited in the setting book, this isn't a land ruled over by a random collection of monsters per se. There aren't all kinds of D&D critters setting up communities. Rather, it's a land that is ruled over by a handful of relatively humanoid monstrous peoples, and one in which the truly monstrous are largely still extremely rare or even unique, including minotaurs, cyclopses, ettens, furies, werewolves, medusae, manticores, chimeras, etc. There's a large population of ratmen and large populations of thurses. This may remind you of another famous fantasy game setting; ratmen being equivalent to skaven in many ways, and thurses being interpreted as a wide variety of different powerfully built monstrous humanoids, but the vaguely goat-like beastmen is actually the original formulation that I thought of for them. (The same stats also work to represent bugbears, ogres, gnophkeh, yeti, Conan-like man-apes, or even Bigfoot as needed, however. A thurse can be whatever exactly you want it to be.) On top of this, some orcs and goblins leftover in the region from way back at the time of Dhakaan still live in the area, and as with all western lands in Khorvaire, it was once the stomping ground for Atlanteans, so they have been here since forever as well. In the warmer areas further south and at lower elevation, there are other power groups, such as the Queen of Stone and her snakemen followers, the pack of werewolves as described are here, the mad wizard and his flesh golem experiments in his solitary tower; all of that fits relatively well. Daemons and undead are the only monsters that absolutely would be seen as anathema to the creatures of Droaam as much as they are to common folk everywhere, therefore they appear in very small numbers, if at all, and tend to be very secretive. And, as always, tribes of human savages and criminals and others find their way here, counting on the general lawlessness of the area to serve them as protection from the forces of law and order that might otherwise have little patience for them, although with such savage and dangerous neighbors, their lives are often brutal and short themselves.
The Sisters of Sora Kell are best represented by Heresiarchs; powerful creatures that combine the best (or worst, if you're facing them) features of a lich and a vampire. They are more likely to manipulate rather than intimidate or rule over most of the inhabitants of Droaam, but they do see it nonetheless as their domain, and will react with ruthless efficiency and force against anyone trying to disrupt the balance that they have established in the area.
There are no mind flayers or gnolls in my game, so the mind flayer NPC can't be used unless you reskin him as something else, and the gnolls, if you want to include them, are probably best represented by ratmen.
Droaam population remixed
22% ratmen (and rat brutes)
20% thurses
14% goblins
9% humans
9% snakemen
8% orcs
8% Atlanteans
7% other common races (jann, kemling, changeling, etc.)
3% monsters (minotaurs, cyclopses, ettens, medusas, etc.)