In Oblivion, Levitation spells have been removed. The reason levitation was removed, according to the developers, is that, unlike in Morrowind, cities are located in separate cells from the rest of the world. Since the cities aren't fully rendered until you enter them, it wouldn't look right if you were to fly over the walls. Levitation also was sometimes used as an exploit in previous games of the series, so it was removed to preserve game balance. However, by climbing on roof tops one can exit towns and see the unrendered world.
Two NPC conversations that you can overhear in the Imperial City mention that Dovyn Aren has been discouraged by the passage of the "Levitation Act." This is presumably an effort to establish continuity with Morrowind. The specific quotes are:
- He still teaches, though he lost his passion for it after the Levitation Act was passed. Can't say I blame him.
- He's getting older, but he can still teach a bit about Alteration. He's been teaching it since before the Levitation Act of 421.
Also, one of M'aiq the Liar's quotes is about levitation:
- Levitation is for fools. Why would we want to levitate? Once you are up high, there is nowhere to go but down.
Several areas incorporate this limitation into their level design. The planes of Oblivion, including the tower, is one notable example. In many multi-level dungeons, there is also often a door at the end of the last level which leads back to a walkway above and near the entrance, which the player can jump down from for a quick exit. Having a levitation spell available would eliminate the need to traverse much of these areas.
While the date of 3E 421 actually predates Morrowind, which takes place in 3E 427, as evinced by the Release Identification note, Morrowind is not subject to Imperial laws due to joining by treaty rather than conquest, allowing otherwise illegal practices (such as slavery).