Lexicons and Langauge Borrowing

Hello all,

For the last couple of months I've been engaged in serious research to
create my own languages. My main interest lies in creating languages for
the purpose of inclusion within fiction. I have a couple of questions
for anyone willing to give me some advice:

I would like to form geopolitical, cultural, and religious labels from a
lexicon by using etymology; ie. followers of, village of, etc. Do I
require grammar structures for this purpose?

Also, is it considered bad form to borrow too much from real languages?
I'm creating some conlangs based on the Scandanavian and Germanic
branches. So far I've borrowed heavily from Icelandic phonology.

Thanks,

Michael