To add to the posts above, people rarely enough express their IC racism trough roleplay. Most player characters tend to be very tolerant, however lorewise the races, and nations, do have some friction between them! Gridania is awful for Duskwight Elezen and Miqo'te Keepers of the Moon for example. Limsa on the other hand has zero qualms with people, even beasttribe individuals can live their lives there, unlike the other city-states. So basically, yeah! There's a lot of racism and nationalism going on, but you rarely see player characters acting upon it. There's still a few around here and there though!
