Are Gems the only things that can be mined and converted into Schmuckers, or can other things (precious metals like gold or silver, or other materials like jade, ivory, or pearls) be used to fund a side's treasury?
Had the Gobwins successfully taken and held Gobwin Knob, would that have made them a capital side?
This is just speculation, but I strongly suspect the reason certain races are "natural allies" instead of having a side of their own is that they're unable to field a real leader. Just like losing your capital ends your side....if you don't have a strong enough leader, you can't make a side in the first place. It seems logical to me.
The elves are listed as "Natural Allies"
, and one of their 'brands', the Superfluous Elves, provided their own Warlord, who was important enough that he feasted with Ansom, Duke Nozzle, Scarlet and the Blue Warlord the night before the siege.
The Woodsy Elves also fielded Tarfu
who was a Warlord.
I don't think it's about providing a strong leader, but rather having a Capital or cities, but who knows? Natural Allies seem to have their own rules, because even without a side they don't revert to barbarians.