This area was closer to Haffaton territory than Faq was. It might even be Haffaton territory.
Wait a sec...
Does this mean they don't know for sure if they're in somebody's territory?
Some games have "borders" that extend out from the cities. It's very obvious when you cross a border, and you always know that you're in enemy territory, even if there are no enemy units around to spot you.
Looks like Erfworld doesn't work like that. So I'm guessing your "territory" is just the area that you can control and defend. So she might run into an undefended city, but not realize that it isn't a border city at all. For all she knows if she flies past it, she could be flying straight into the heart of Haffaton territory. There's no reason to assume the territory is roundish, it could be long and skinny, or egg shaped, or have intersections like a capital H, or have a few satellite cities sticking out like spokes. If you there aren't any borders for units to see when they cross, then you just don't know. Did you miss a city a few hexes off to your left? Are you still following the "border?" Are you getting deeper into Haffiton territory, or still skirting the edge?
To a certain extent, traveling and mapping as you go will eventually show you the extent of a kingdom, even if all you can do is mark terrain and city locations. At some point, you'll stop seeing Haffaton cities and units, so you must have left their territory. But it's hard to be thorough at the same time as you're trying not to be spotted.
This "undefended" city is almost certainly a trap. Well, if it wasn't interesting story-wise, we can safely assume it wouldn't have been mentioned, so we might know more than Jillian right now. If there are no units in the city, there will be nobody to report back to the Overlord telling him what side razed the city. Every now and then you do get lucky, especially if they don't think there are any hostile units around. The city might only be undefended for a turn or two, while a replacement unit pops or something. It's not unreasonable for Jillian to think this is an opportunity -- she's a mercenary, she lives by grabbing opportunities that pop up.
But there are hints that Haffaton might know they're around. They've spoken to other sides, which for all we know would sell scouting information to Haffaton. Most significantly, they've spotted Charlescomm
units, who we KNOW
sell scouting information. They also mentioned looting a Haffaton orchard for rations. A very observant Overlord might know that something
is out there, and might be willing to set up a little trap just to see what it is.