Problem:
The established player base and in fact just a small number of them have such an iron tight grip on the game at the moment that it is virtually impossible for new players to break into it. Crime for a large village with the ability to freely repel nidbanes and enough people to regularly check their walls can be commited without any comeback at all. So they are going around mowing down new players before they have had a chance to get any sort of stats up, communicate with other players to form their own groups etc or build defenses. Those that survive a while then end up penned in behind palisades with no chance of ever progressing to the stage that they can possibly challenge said established factions which means that the game is stagnant.
Suggestion:
Get rid of Nidbanes (good idea but don't work). Instead bring back something akin to the old slider system with sliders not being adjusted manually but instead being adjusted by the actions of the hearthling. Don't commit a crime for a while and your learning ability improves, the more crimes you commit the more it decreases. Possibly also add an aura around characters that have commited crimes such that other characters in their vicinity(or vicinity of their hearthfire) also have a negative affect on their sliders to encourage people to weed out criminals in their locale. Perhaps this way crime would be commited for a reason rather than just to grief new players into quitting the game?