I read in RoP: Magic that Place Spirits, or Genii Loci, can be Daimons, and powerful ones often are. But that brings me to the question: where do these spirits live?
Take the Rhinefalls for example. In it's background story, it was trapped long ago by giants and dwarves, who placed a huge rock on it, trapping it in the falls. If this spirit is a daimon, couldn't it just disolve it's aspect and create a new and free one, regaining control of the Rhine? Daimons, by their definition (if I understand it correctly), live in the Magic Realm, sending aspects to Earth. It just doesn't seem to fit with the Genii Loci. Can someone explain how it works?
Your understanding is correct, and it does indeed pose a problem.
A hypothesis (although it doesn't contradict any rules) could be that by dissolving an Aspect the spirit may risk losing its connection to its location.
In the time that it takes before it can send another Aspect to the spot (I believe that they cannot re-manifest within a day) the giants and dwarfs may have claimed the site for themselves and be able to exclude the spirit from its locus (thus weakening it). Thus for a spirit like the Rhinefalls, it may be better to maintain the Aspect even though it can't do anything with it; to do otherwise might cause it to surrender its status as a genius loci or Daimon.
My reading was, incidentally, that the water itself was what was trapped, not the spirit... and thus the reduction in the area that the spirit was a spirit OF. Not any particular harm to its Aspect, which it could indeed ignore.
As for daimonic genii locii... I haven't completely decided how I want them to work yet, in my games, but their location is an awkward question. I suppose their location is what connects them to the mundane realm and allows them to manifest, in the same way that a theurgic cult is an ascended magus's connection to the world.
