Wurm online kinda fits if you can stomach a game this dated. Other old games like Old school runescape or Star wars galaxies (playable on a private server) might also scratch that itch? All three of these titles have combat but allow you to ignore it completely AFAIK.

I also want to mention Book of travels just because it puts so little focus on combat, however it doesn't have much in common with Palia and I have no idea how the population is currently.

In your position I would unironically look at some Minecraft servers first, those can give you a very similiar experience.