Option 2, make it small first (not too small, village size maybe) and grow when we have more numbers.
Edited: If we do, middle is sacrifice area not big as temple but a stand. Sacrifice captured criminials, animals. Other race can bring sacrifice to show us more respect. Then we have stands and houses.
If we do not have our own 'village' what if Kha' fed up of other races being mean and have no home. We will be on mainland and can go out adventuring. This place will be a safe place to get respect, and shelter. We might even welcome other races that respect our ways along as we trade to boost our relationships.