And I'm afraid I really don't buy into this "closer proximity" idea. You're only a public moongate, recall scroll, magicians portal or a few minutes jog from the next community. If you "really" want to interact with other members of a community does it "really" matter whether you are housed on the same street or strungout as we are now. If you are looking to interact with someone how long does it really take to visit each active player run town in turn? 5 minutes? less?
We have everything already in place. Just use it?
A five minute run (Generally takes me 10 mins to run to Cove BTW) is far more of a disincentive to interact than you would think. During CoY, there was constant every day interaction between all the guilds. Partly this was due to a more liberal culture concerning interaction - nowadays, you're liable to get your guild peaced if your character legitimately gets into a fight whilst in another guilds territory, especially some places. But mostly it was because people were so close and there were so many neutral places where you were pretty much guarenteed interaction. Nowadays you have to walk right into the heart of an enemy guilds territory for any chance at interaction, which in some cases isn't realistic and is tedious when you have to commit yourself to a long trek to go there.
At the end of the day the proof is in the pudding. I can only speak from personal experience, but there's hardly any spontaneous inter-guild interaction nowadays. It all has to be staged, which makes it all dull and predictable. Pretty much no one stops by SK nowadays, whereas we'd have constant visitors, both friendly and (mostly) hostile, in the CoY days. The community wasn't any bigger then and Grd wasn't on better terms with everyone else. The only explanation is the massive change in proximity.