The Elder Scrolls does racism fairly well. Prejudice and bigotry coexist with ignorance and simple superstition. The politics of Morrowind are deeply entwined with the recent end of the race based slave plantation system. Skyrim's secondary conflict is between the provincial blood and soil stormcloaks, the cosmopolitan empire, and the fanatically, supernaturally xenophobic Thalmor. Khajiit aren't allowed to entire stormcloak cities, dunmer refugees from Vvardenfell are confined to a ghetto and face racialized violence, the ongoing low intensity conflict in the reach pits the indigenous reachmen against the Nord colonizers, Redguard travelers from Hammerfell are regarded as stranged and exotic. It's not always well done, but the racism in Skyrim generally reflects the material realities of the people involved instead of simply being a clusmy allegory for a real world situation.