Drakkor had occupied the lands of Thallyn for some time, and the armies of Thallyn never returned, nor did their King.
After nearly a decade of occuptation, the people of Thallyn began to see their invaders as being, in fact, an improvement. The King of Thallyn was not a good ruler, and was blinded by an ambition to expand their borders to realms beyond, regardless of the cost to their population.
During the years of occupation by Drakkor, relations between the invaders and the invaded unexpectedly improved: The Drakkor forces had a strict code of honor, which meant their occupation did not result in the looting and ravaging of the people of Thallyn that so commonly accompanies armies as they pass through enemy territory.
Initially, of course, tensions were high, and the usual assassination attempts and clandestine operations by the movers and shakers of Thallyn against their occupiers occurred. But after these dissidents were rooted out and either imprisoned or executed, Drakkor discovered that the general population of Thallyn was apparently quite receptive to their invaders.
This amicable occupation seems to largely be credited to a Dragonborn that in the history of Dracallyn is recorded as "The Unifier". Their place in history is brief, but it seems they worked to foster relations between Drakkor and Thallyn, with the intent to merge the two nations together, seamlessly.
Over the years since Drakkor took Erutak, this figure seems to achieved success, and the ruler of Drakkor met with the acting ruler of Thallyn, with The Unifier acting as a mediator. It was decided that their two lands would be joined once again, and a new city built between the capitals of both nations. This city, as well as the newly formed nation, was given the name Dracallyn.