Reasons why it makes no sense:
-They only have genetical diffrences, so they would have merged into 1 group through years of reproduction between illagers and villagers. Or one group would have assimilated into the other, if one of the groups genes are dominant over the other
-How did villagers and illagers form in the 1st place ? Diffrent races/ethnicities form because of geographic barriers seperating diffrent populations of a species. But in those villages there are no such barriers.
-Why do only the illagers have an insentive to fight at the frontlines of the war and no one from the villagers ? We only know about 1 biological diffrence, their diffrent skin colour. And skin colour alone does not insentivse somebody to go to the frontlines or not. It would make more sense if also some villagers went to the frontlines. Meanwhile the legend showing some illagers not chosing to go to the frontline makes acctualy sense
-According to the origin story the axe was invented by knowledge and first created by knowledge, which makes no sense. Because axes were needed for people to get ressources like wood.
(Ik that in the legend they are both called villagers and that only their skin is the diffrence. But I still wrote villager and illager, because I am to lazy to write white villagers and grey villagers all the time)