sound like the producer wants you to simply list the entity types, and what they can do in the game.
i'd assume they would then pass those design specs on to the dev team to figure out whats doable and whats not.
perhaps confirm with your producer that this is the game plan before proceeding.
the siloing might be due to the producer's need to keep tight control over the process for some reason. but it prevents the synergies you get from team interactions between all levels. uncontrolled interactions can lead to chaos.
actually, all of this sounds very scary to me. a producer who doesn't encourage the team talk to each other, a designer who's not sure what to do - how the heck did you become the designer? (nothing personal here - but you see what i mean?). something smells fishy to me. don't know if its just a case of the blind leading the dead, or perhaps some sort of scam. maybe i'm just paranoid. glad its not me, that's all i have to say.
a good rule of thumb, whenever in doubt about an assignment, its always good practice to go to one's superior for guidance. it shows you want to get the job done, and done "right" (whatever your boss's definition of that is). those types of employees get descriptions like "self starter - takes initiative". - a highly prized quality in any employee.