I think the build 'limit' should simply be a bulk number.. meaning you could choose to build 1 single mega village, you could build a few large settlements in different regions, or you could build 10 smaller sized settlements.

If it's in TES VI, I hope that they give us more build freedom, even more than Fallout 4. Give us the option to turn off the auto-lock for placement, options to allow objects going through other objects, let us build basically anywhere on the map outside of villages, existing settlements or areas where it might conflict with the storymode. I'd love to be able to build an intricate treefort home, a dwelling high up along the cliffs, a waterfront shack or a cave hideout.

Also, the settlement mechanic should in no way be mandatory and should not be part of the story like it was in Fallout 4. I think the desire for settlement building is pretty split overall.. you either want it or you don't. I personally enjoyed it, but I understand the frustrations that people had in Fallout 4 when the game forced you to build stuff.