Picking up from where Morrowind and my last blog entry (be sure to read it for context) left off, as unrest in Cyrodiil grows and the changing winds brought by the Nerevarine start to be felt, some important developments take place:

As faith in the Tribunal continues to weaken, many Dunmer resume and strengthen their practice of ancestor worship. As souls are no longer needed to power the Ghostfence, relatives can once more resume their posthumous duty of serving their hearth and clan.
Ancestor worship had never been replaced by the Tribunal, merely coopted and contorted, so the transition back to it is rather smooth. The Tribunal are increasingly deemphasized, while the saints, as powerful ancestor-spirits, gain somewhat in prominence, Nerevar first and foremost as a powerful incarnate.
While the good Daedra regain some of their former standing, ancestor worship and Daedra worship are separate things, and most Dunmer content themselves with the former. That being said, the strong religious unity of the Tribunal is a thing of the past, and Daedra worship -- both peaceful and sinister -- as well as worship of other faiths such as the Nine Divines is on the rise, and with it religious tensions. The presence of the Nerevarine keeps any conflicts from getting out of hand, however.

That said, the Nerevarine's attention is stretched thin. In the south the last of the Dres Matriarchs have died, and with them their arresting influence on the by nature quarrelsome and freespirited Dres clans, leaving the task of keeping them in line to the Nerevarine and the house's recently-won allies, King Hlaalu Helseth and House Hlaalu. These allies have since learned of the deals the Matriarchs had made, and that the strong ally they thought they had gained is, in fact, on the verge of blowing up in their face.
Without the direction of the Matriarchs, the Dres clan elders refuse to sacrifice their clansmer to the Hist and their tributes cease. House Hlaalu attempts to keep the payments up by sending over Khajiit slaves under guise of manumissions, and even send back Argonians, but given the nature of the Hist they have no way of knowing if those alternatives are accepted, or even if the Hist are aware and bothered by the deal being broken.
The manumissions serve another purpose as well: calls for abolition are on the rise in Hlaalu territory, and with Helseth gaining greater power through his scheming expectations grow for the outlander king to take action. The Hlaalu council starts to feel that it is losing its footing; with House Dres rapidly turning into a paper tiger and the Empire steadily drawing back into itself, it is unable to advance its agenda, while with the loss of Tribunal faith, acquisition of an outlander hortator and consolidation of Imperial presence in western Morrowind many Hlaalu are becoming Imperialized in earnest.
Morrowind's economy begins to unravel as Hlaalu plantations lose slaves to the activities of the Twin Lamps, the supply of Argonian slaves from Black Marsh ceases, and Indoril is no longer equipped to direct the flow of trade. Only Telvanni seem to do well in such an environment, as their root towers continue to sprout out of the ashes further and further afield.
The Redoran are facing another issue entirely, as High King Thian of Solitude's dominance over the Sea of Ghosts continues to grow and he turns his attention to Morrowind's shores. While the local uprising he had supported was suppressed, it had performed its task of revealing the cracks in House Redoran's shell for Thian to exploit. Nord raiders begin to appear off the coast, taking advantage of every distraction to harry the already battered house.

Nerevarine stands almost alone in facing many of these issues, as most other leaders in Morrowind are either weak or absent as a result of prior events. But there is another issue, too, that few aside from the Nerevarine are aware of: the moon over Vivec was never stopped, but is being held in place by faith in the Tribunal, and that faith is failing. It is clear that something big is about to go down, in several ways.