Content should be spread out, not crammed into every corner of a claustrophobic map.
Why? I can see the downside, that being a lot of downtime and dead space between the interesting fun bits, but what's the benefit?
I'm getting sick of treading the streets of steampunk-infused contemporary London, myself.
That's fair enough, but I'm sure it'd bet nice and fresh with some new content.
And Daggerfall's big-ass map is a major plus if you ask me.
Clearly you've never played Daggerfall, because then you'd know it's really, really not. All that empty space might as well not exist, since you never actually go out into it. All your quest locations get marked on your map, so you can and do just fast travel to them (because it would take six hours of real time to walk there), and there's no point trying to explore. It's not like Skyrim's densely packed map, where you can just pick a direction and stumble upon something interesting within five minutes. In Daggerfall, it'll take you hours to randomly come across a point of interest. That's what realism gets you. There's a good reason they never made another game like that.
Now LT almost certainly won't turn out that bad, but I still see no reason to have an overworld map that's 99.5% empty tiles. You could easily expand the game with new zones without having an overworld map at all. You come to one of the exits out of Dominion, the game gives you a list of known locations you can go. You click your destination, you get a screen saying something along the lines of "after several days of travel, you arrive at your destination", and boom, you're there. Two clicks instead of several hundred. You could have random encounters built into that, and even exploration. A simple menu option along the lines of "explore the vicinity of <choose a known location from a list>" would do just fine for that, and if you find something interesting, it gets added to your list of known locations. I see no reason to have a map at all, all it'll do is just waste a load of your time by making you visit every tile to make sure you haven't missed anything.