While you could do a system like Eagleon's, where the price for knowing a language shrinks as you get closer to the country where it's prevalent, I prefer the following idea.
The theory is fairly simple. At some time in the world's (read: game's) history, some all-encompassing empire (such as Achaea's Seleucar or the real world's Rome) ruled the game area, enforcing or introducing a universal language. While this empire may not be around by the time the gameplay begins, the language is still present and is a common language shared between cities, races, and guilds.
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