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Indoril Nerevar was a king of Morrowind, am I wrong here? So why doesn't the Nerevarine take the throne that rightfully I use the word fleetingly. That may sound simple, but if King Helseth sent the assassins after you, then why didn't the Nerevarine bop him off? After doing the earth-shattering things that the god-killer had done, why not? What could possibly be any worse than killing just another figurehead of power?
If someone claiming to be the resurrection of Abraham Lincoln showed up, would he be able to rightfully step in the Oval Office as the President? Okay, bad comparison, republics don't work in the same way as monarchies do; but you should get the idea. Maybe a resurrected Charles I for the United Kingdom? I'm sure it would fly well. Also, if the original Nerevar was merely Hortator, then he wasn't a true king but just the guy in charge of the country for the duration of the war.
Morrowind is under a different system of government now. The terms of the Armistice dictate that the Grand Council still retains power the Houses' respective districts, but the Empire controls Morrowind in the long run, and Helseth holds the veto. The Nerevarine, therefore, is not the king of Morrowind by right, because rights have a tendency to change. I know they couldn't stand up to the change that Helseth was planning and with Redoran got a bit aggravated but I don't think the Nerevaine was associated with that.
An individual who rose from nothing and defied all odds to become ruler of the Veloth hordes of Vvardenfell a Nerevar Incarnate that has spilled his blood and guts uniting warlike tribes and clans to defeat a common enemy in Dagoth Ur and perhaps going further and ridding Morrowind of the occupying Imperial forces. Then there is Helseth whose sole labors consisted of riding on the skirts of his mother and poisoning his uncle and his nephew to be next in line for a throne in Mournhold, protected and propped up by foreign Imperial control.
I was supposing that the Nerevarine have easily killed Helseth. Almalexia or Hler could have too. Hler is an assassin as well, and it would be have more than easy to poison the king. Considering that there were little to no imperial consequences to the mysterious death of Llethan, the death of Helseth wouldn't have been much different. Also, the Nerevarine does work for Helseth, i.e. submits to his command so, theoretically, he could also just be seen as just a champion of the King or some jive
Would it cause a civil war? Most likely. If the Nerevarine murdered Helseth, he'd probably gain the support of Redoran, Indoril, and Telvanni quickly, while Dres and Hlaalu would likely side with the Empire, in order to maintain their positions, and perhaps further them, once the traitor was put down. Or maybe they'd eventually side with Nerevarine, in hopes of ridding Morrowind of the Empire, and become the most, monetarily speaking, Great House in a freed land? Though I personally would highly doubt that, as they're in good with the Empire anyways.
To me this boils down to a what-you-make-it thing - highly debatable and practically unsolvable, but hey for the sake of discussion, I will take a crack at it, If you wish to believe that due to the Tribunal Dragon Break that Nerevar was a mere general then it's safe to say that the Nerevarine isn't entitled to jack crap besides what he gained by prophetical consumation. Protector of Morrowind probably isn't on the same level as king and the people of Morrowind probably see him as a mere "war hero" but on a much grander scale.