Dunbar's Number is believable
I believe that Dunbar's Number is a very believable approach although it needs a slight twist.
Think about Goblin (or any other) society as a connected graph of who-knows-who. There is a vertex for each member of the society and there is an edge between vertices if and only if the two members know each other.
Then, the Dunbar's number, let it be $k$, is the upper limit on edges that originate in a vertex. Assume that this limit is saturated and each member knows exactly $k$ other (the graph is $k$-regular). It turns out that the expected distance between two arbitrary vertices in the graph is a $\Omega(\log_k N)$ (see 1) where $N$ is the size of the graph (the number of members of the society). That notation means "at least".
Solving the equation $x = \log_k N = \frac{\log N}{\log k}$ where $x$ is the bound on distance for $N$ (see 2) gives $N = k ^ x$ (unsurprisingly :-P).
Now let's think about how to interpret this. The Dunbar's number $k$ is clear, that's how many meaningful societal connections can a member maintain (or rather an upper bound on it but you can assume Goblins are close to it since this should happen in densely packed, nomadic and warrior societies).
The distance $x$ can be thought of in terms of cohesion of the society. More developed societies form more abstract hierarchies and concepts of inter-personal relations.
When the size of society grows beyond acceptable interpersonal distance, the society splits.
I would guess that Goblins would not trust anyone more distant than a friend-of-a-friend whereas you are pretty much willing to trust me that I will not kill you even though we do not have any friends in common that would vouch for me.
Now, assuming that Goblins are much more primitive than people, let's say they have Dunbar's number $k = 25$. (Or, actually, they need not necessarily be that more primitive, this number might grow super-linear or whatever, check Dunbar :-) The upper limit on Goblin society with $k = 25$ that operates on the friend-of-a-friend basis is:
$$
N = k^x = 25^2 = 625
$$
Pretty close to your $500$. Remember that these are all upper limits; not every Goblin has all $25$ friends and it is not all perfect such that there is always a friend in common. I am sure you could come up in your settings with something like $25$ being slightly larger than average band of Goblins that sets for raids together. Or, if you want, the other solution is e.g. $k = 8$ and distance $3$ for $8^3 = 512$ with smaller units (families?) of goblins and slightly more complicated societal structure (what about families keeping together on maternal lines through mothers and grandmothers of a clan?), also $5^4 = 625$, just larger the distance the harder it will be to saturate that upper bound.
Just if you are curious, for people it gives:
- distance 2: $150^2 = 22\,500$
- distance 3: $150^3 = 3\,375\,000$
Hope I did not mess this up at some point.