What was going on in ancient Europe outside of the Roman Empire? Where there no large realms or big cities?

Let’s say that you have, for reasons best known to yourself, decided to tour the northern frontiers of Roman Empire around 100 CE, in the first years of the good and soon-to-be-glorious emperor Trajan.
Before you set out, however, you pause to reflect on the nature of the imperial frontiers in your era. By the beginning of the second century, the Romans were – with a few noteworthy exceptions – more or less content with the boundaries of their Empire. Although they sometimes liked to claim that all the world was under their sway (the more remote peoples just hadn’t realized it yet), they acknowledged in their more practical moods that there were many parts of Europe that had not been conquered, and frankly weren’t worth the effort of subduing. The great expansionist campaigns of the late Republic and the reign of Augustus had been motivated by political pressures (first competition among the Roman elite, and then the desire of the first princeps to bolster his authority) that were either absent or weak in the mid-imperial era. Augustus himself had advised his successors to conquer no further. The hapless Claudius had felt compelled to conquer the soggy wasteland of Britannia as a publicity stunt, and Domitian had made some rather unconvincing military demonstrations along the Rhine. But expansion was now the exception, not the rule.
As we shall shortly see in our magical mystery tour of the barbaricum, there were valuable resources, and sometimes very substantial populations, beyond the effective limits of Roman control. There were, however, few prosperous (i.e. usefully taxable) settlements, at least at first. Julius Caesar had claimed that the Germans differed from the Gauls in their indifference to agriculture. Although we know from archaeology that the strict distinctions Caesar drew between the Germans and Gauls were much less clear in reality, it does seem that the Gauls were more “settled” than their eastern neighbors. A century and a half later, Tacitus could still remark the Germans’ lack of cities. The same situation obtained in most places north of the Rhine and Danube. These were not the sort of places that readily repaid conquest. The Romans generally preferred to control or influence such unremunerative territories indirectly, through friendly chiefs or client kings.
But change was underway. The presence of the Empire – and more importantly, of the very substantial markets created by the legions stationed on the frontiers – had spurred the economic development of the regions just beyond the frontier. Market towns and even Roman-style villas cropped up in “barbarian” territory, built by local notables with close ties to the economy and society of the Empire. The frontier was really a broad zone of contact and interaction, wealthier – and in some sense, more Roman – that the less developed territories on either side.
And now, a hasty grand tour of the northern fringe
You begin, rather reluctantly, in Britannia. All you know about Ireland (which you call Hibernia “Winter Island”) is that it isn’t worth conquering. Boudicca’s revolt is a distant memory, and the island’s cities – though still smaller and less prosperous than those on the continent – are thriving. The northern parts of the island, however, remain unconquered. A little over a decade ago, in the reign of the late and unlamented Domitian, the energetic governor Agricola defeated a great throng of unwashed Scots in the Battle of Mons Graupius. Agricola, however, never finished his conquest (his troops were needed on the German frontier), and the thinly-settled north has been left to its own barbaric devices. Occasional raiding parties cross into Roman territory, but they are not taken especially seriously; an officer at the border post of Vindolanda recently described a foray by the “Brittunculi” (lil’ Brits) as an underwhelming affair.
Crossing the Fretum Gallicum (English Channel), you arrive in Gaul, and head northeast to Lower and Upper Germany (Germania Inferior and Superior), the heavily militarized provinces along the upper Rhine. Beyond (as you’ve probably guessed) are the Germans. They are not, at least by Roman standards, an urban people. As Tacitus notes:
“It is well known that the nations of Germany have no cities, and that they do not even tolerate closely contiguous dwellings. They live scattered and apart, just as a spring, a meadow, or a wood has attracted them. Their villages they do not arrange in our fashion, with the buildings connected and joined together, but every person surrounds his dwelling with an open space, either as a precaution against the disasters of fire, or because they do not know how to build….They are wont also to dig out subterranean caves, and pile on them great heaps of dung, as a shelter from winter and as a receptacle for the year’s produce…”
This is something of an exaggeration, since the more powerful German chieftains tend to have fortified halls ringed by substantial settlements. And it is worth stressing that there are powerful German chieftains, many of them veterans of the Roman auxiliaries. The various leaders and tribes, however, tend to exist in shifting and uneasy coalitions. The Romans periodically subsidize friendly German potentates, but they recognize that a divided Germany is a manageable Germany, and have no interest in seeing powerful kingdoms emerge. In 100 CE, their efforts seem to be working.
Proceeding south and east across the recently-occupied Agri Decumates (the angle between the Rhine and Danube), you enter the Danubian frontier regions, anchored on the provinces on Raetia, Noricum, and the Pannonias. During the reign of Marcus Aurelius, these will be the epicenter of the bloody Marcomannic Wars. At the moment, they are relatively quiescent, though the Dacians have been stirring up trouble in the region. As on the Rhine, there is little evidence for urban development outside the frontier zone.
The only powerful polity along the Roman northern frontier is the Dacian kingdom. The Dacians have an irritating habit of defeating Roman armies. Domitian campaigned unsuccessfully against them nearly twenty years ago, and Dacian raiding parties have continued to plague the province of Moesia. The Dacian king, Decebalus, is an unusually defiant barbarian – and can afford to be, since his kingdom’s rich gold and iron mines have enabled him to equip and pay a formidable army. Although the Dacian population is settled, the country has no really large cities. A partial exception is the capital, Sarmizegetusa, which (as later archaeologists will reveal) had a very substantial citadel and large residential quarter. A few years after your visit, however, Sarmizegetusa will be destroyed, Dacia conquered, and Decebalus beheaded by the Trajan’s legions.
And that concludes our tour. At least parts of northern and central Europe were more populous and wealthy than the Romans acknowledged. But they were not, by and large, urbanized – or at least not in a way that the Romans, with the Mediterranean-centric ideas of what a city should be, would recognize.