I recently had a quite... interesting discussion about Lore and mods through PMs*. Considering that this topic occasionally is mentioned in threads I've cleaned up my train of thoughts and summarized them here. This thread. It's still a bit random, though.
The most important thing about the Elder Scrolls lore is that it's not set in stone. There's no "ES bible" or something. Things can change. Things can be added. Things can disappear. And, most importantly, there often are no definite answers. Example given what happened to the Dwemer? I think it's one of the strengths of the Elder Scroll lore that it isn't a clear cut between "right" and "wrong", that there is speculation - and uncertainty.
That said if a mod tries to be lore friendly or not does say nothing about the general quality of the mod. If you want to have the mods you use lore friendly, simply don't use any mods which don't intent to be so. The choice is the user's. A lot of great mods, for both Morrowind and Oblivion, didn't take lore into account, because it simply wasn't part of the vision that drove the modder. This is not to say that a mod not taking lore into account automatically breaks it. No. Lore is flexible to a certain point.
In fact no mod can exist without some "lore bending". Whenever something new is created, the question is not if it is created true to lore - this can't be - but how much it fits in established lore. Even the developers take their liberty with lore (two words: Cyrodiil, jungle). Modders must do so, because unless they recreate exactly what's there they have to take some liberties.
The question is, when and only when lore is important for you, is to what extend the mod fits into established lore and into the general "feel" of the Elder Scrolls lore.
And of course there's the question how much does lore fits the game, or the vision of the modder? I'm the first to admit that I will sacrifice lore immediately if it's going against gameplay. It seldom is, luckily. Yet there are cases. I'll come to that later.
Besides good old fashioned lore there are several... special kinds. I don't think naming some of them "lore" is appropiate, but that's how they were named, so I'm sticking to them:
Xeno lore: All kind of stuff coming from other works imported into the elder scrolls world. Pretty much the horror of all lore enthusiasts, but loved by a lot of people. Just look how popular dwarf mods are - and I'm not talking about the tall elvish atheistic mechanists they are in the elder scrolls world, but little runts with fake scottish accents. Hammering: Once I talked with a modder of a popular quest mod about his use of a Daedric Prince, and his response was along the lines of "well, it sounds cool to most players. I know it's completely off, but I needed a name!" Reimaging: This is breaking of actual established lore for the sake of gameplay or consistency or your own visions. Can be more or less lore compatible - example given RBP is one big reimaging of the existing races, but I tried to keep true to the "ES feel". Some are okay with Reimaging, some aren't. Although I see a problem here when reimaginations are forced down people's throats as "true lore". It isn't. It may be an even better alternative to the established one. In my experience, and I know that some tomatoes will fly in my direction, most mods claiming to be "true to lore" are actually reimaging things. Weasel lore, lore patching: Trying to explain gameplay aspects through lore. Used very often in the Vanilla game (e.g. "Levitation Act"). Is sometimes used by mods, but not very often. And only when it's about explaing oddities in the existing game not adressed by the developers (e.g. finding an answer why only one breed of Khajiit appears in each game can be weasel lore. Explaining why Kothringi are confined to Black Marsh today would not - they've gone extinct). Lore bending: Often when something is unclear in established lore, and you want to tackle these aspects in a mod, you need to make decisions in which direction in the "grey maybe" that are many areas of the Elder Scrolls lore you want to go. Can cause conflicts of interest if the player has the exact opposite opinion in the "grey maybe". Example given the controversy about lesser daedra - any mod tackling them must find it's own stance. Lore reordering: Commonly it is said that newer lore trumps older lore if conflicting. Some do not share this opinion. And it's their right to do so. A mod turning Cyrodiil into the province described in earlier games could be very interesting.
In the end, if a mod is "true to lore" or not is harder to answer than it first seems. The list doesn't even cover the introduction of outright new elements. Any mods, even those made to work within existing lore do some bending, interpretation or outright reimagination.
I don't think the question if something is "true to lore" should even be asked - what is important, imho, for some people is more if something is compatible to existing lore. "Lore friendly", or however you want to call it.
And this is somewhat subjective, too. If a mod is used or not is a subjective decision. Like it is also a personal decision if a mod tries to fit into the existing lore framework or not. It's not making mods better or worse, just different. And choice is good.
Now if lore is important to you, then lore friendlyness could be evaluated along the lines of how well it fits to existing themes, how well it matches previously established lore, but most importantly... immersion. Lore serves to deepen the world, deepen the suspension of disbelief. These are just very subjective means, different for everybody.
So to summarize this rambling:
1. It's the decision of the modder to the extend he keeps true to established lore. Likewise it's the decision of the mod user to use a mod or not. There's no need to get upset about this. No mod is made for everyone.
2. "true to lore" is misleading. Mods cannot be completely true to lore. Better would be the question, if it has to be asked at all, if it is friendly to established lore or not.
3. There are several oddities when it comes to lore, and not all of them can be recognized immediately as "not true to lore".
(* = And for the record: Don't accuse someone of "lore *censored*" because of a book that comes from Vanilla Oblivion. Just saying.)
[i was asked to post this here. I won't deny such a request .]