The terms were harsh, but Titus II believed that it was necessary to secure peace and give the Empire a chance to regain its strength. Titus II knew that there would be no better time to negotiate peace, and late in 4E 175 the Empire and the Aldmeri Dominion signed the White-Gold Concordat, ending the Great War.
The Empire doesn’t have the power to *beat* the Dominion, and they don’t have good enough intelligence assets to stop the Thalmor from screwing around with their internals more or less at will.
