What RArcher and Mohawk20 are saying is true. I have added a screen shot to illustrate.
If you are using the default terrain size it will be 10,000 meters by 10,000 meters in size. By default it is placed by the lower left corner which is at 0,0.
If you are using the default population size, it will be only 1,000 meters by 1,000 meters and it is placed by it's center, which is at 0,0.
To get the population to cover the terrain you would need to move the population bounding box to 5000,5000 and increase the size to 10000X10000. You must realise that this will create a lagre number of trees which will add time to your render. Many of those trees will not be seen, but Terragen will still calulate them.
So to echo RArcher, get your camera to a birds eye view and position you population to cover what the camera is going to see when it renders the final scene.