So where do the dragons live? Anywhere they want to!
Seriously, the largest congregation of dragons live at the Dragon Lakes in Hughijen. Here they can hunt the large fish in the lakes or the goats and other wildlife in the hills and mountains. Single dragons and small groups will live throughout the world, wherever they can find good hunting grounds.
On the continent of Sulnuun, away from all the other intelligent races, the dragons live in large numbers. Mainly surviving on their domesticated dinosaur-like cattle, they live blissfully ignorant of nearly everything going on in the rest of the world.