When writing a story, you create the characters, the story-line, the background, you create everything. The place where your story unfolds is just as important as the rest of the story. While this piece is mostly directed toward fiction authors, the basis can also have relevance to other genres as well.
It is important to note that the setting you create for your story be just as well established as the characters within the story itself. Fiction authors have great leeway in setting the foundation of their story and being able to adjust it to fit their needs within the story they are creating. There are multitudes of examples of creating fictional settings, some are based upon realistic settings, whereas others are entirely created, and finally you have a mix of the real and the fantasy.
Another way to think of the world your story is in, is to be able to look at it as another aspect of the characters you create. Your world determines who and what your character is, how they operate within the confines of your world. Manipulating your world allows you to advance your story telling without actually adversely changing the makeup of your character.
So how can the world created have an effect upon the character created? The world is the environment, and as such, it is a shaping force. Magical lands, bleak lands, tumultuous lands, these will shape the creation of the character and the story itself as these will add elements that the character and the story respond to as they progress through the life you give them. If there is no effect, with a justifiable explanation, your story will not have the synchronicity, that is the blending of the of the story to the world and you create an odd juxtaposition that will not be able to fully harness the reader’s interest.
You want your world to be believable and credible to the reader. A fantastic world can be created, but if you have elements that do not fit in with a plausible explanation, you are removing the ability to have the best story you can. Now this is not to say that you cannot have a changing world, as long as you are able to lay the groundwork for the transition.
Remember, your world is where your characters must live and die. Characters move the story, your world moves the character.