When you are writing fiction, you have to make the setting believable. Especially, if you are writing fantasy, or even horror. If you can make the setting believable, then no matter how strange your story gets, the reader will have something they can relate to.
How do you make a believable world?
World building can be as simple or as complicated as you want it to be. You don't need to make a world, to understand how to build one. You don't have to come up with everything all at once either. I think it's better if you do not, so you can fill the items in as you write and edit.
For simplicity, I will show you how to make a city. You can take some of these same principles and expand on them, if you are making a whole world..
For my series The Coiree Guardians, I decided to make up the city that most of the action takes place in. Where to place it was simple, in a sense. It was on Earth, in the United States, somewhere in the Midwest/rust belt area. Because I had a general idea where it was, the weather patterns, the type of people, buildings, and basic layout were already there. For example, palm trees would not be in the city.
Deerbow City became a mis-mash of cities I had lived in, places I had visited, and other places I had never set foot in, but knew about. Yet, that was just a general idea. What do you need to fill it out, to make it seem real? The same things that you would find in a city; streets, neighborhoods, landmarks, parks, and businesses.
I made a map. As of right now, the map is not fully filled in, and might never be. I started by drawing out the river that bordered one side of the city and it's namesake. Because of some of the things I had written, I knew there were three areas that had to be placed into the city. I didn't draw anything, but I wrote notes about where the places could be on the map.
At the same time, I came up with sketches of some of the important neighborhoods. Like a character sketch, I came up with the history of the neighborhood. I did not have to write an entire history, just a brief overview.
Konakove: First settled by Eastern Europe immigrants Most of the people that lived there worked in the lumber mills along the river. Over the years groups of new immigrants will come to Konakove and first settle in the neighborhood. It's a blue collar
As I wrote the story, I would name streets and places. When I came up with one, I would add it to the map. Not precisely where I thought the places would go, but a general area.
Other main areas had to be thumb nailed, as I went along. Cemeteries, forests, nightclubs, etc. I treated each one the same way.
What if you wanted to make a new world?
First question to ask is; What type of world? Earth-like, Mars-like, artificial, goes through space on the back of a turtle, the possibilities are endless. In the case of the world, you would have to come up with the weather and topography as well.
After you have the general idea of what type of world you are making, zoom in and start small.
Most stories will not encompass a whole world, most will deal with a small portion of it. Start by writing down some ideas.
Perhaps your story starts in a seafaring town.
What size is the town? How busy is the port? Do they offer safe harbor to pirates? Are there pirates? What are the natural dangers, monsters, animals, sea?
If that doesn't spark your imagination. Take your main character on a walk through the town.
Write down what they see and do on a normal day. This will give you a good starting place that you can build upon.
Luckily on the internet, there are sites that can help you design a town, city, country, or even a world. Most of the places cater to role players, but the ideas you can get, should help you if you ever are stuck for a small town in the middle of nowhere.
http://www.seventhsanctum.com/ if you need names, concepts, or any other random help.
http://nine.frenchboys.net/housing.php if you need a name for a town.
http://donjon.bin.sh/world/ for a map of your world, to fill in. And other generators.
Of course http://en.wikipedia.org/ if you need to find out anything, like how oxygen works in the ocean.
It could take years to develop a fiction world to the completeness that some fans of the genre like to see. Yet, you do not have to have every little detail worked out to make the world believable. In your stories you are only showing a small part of it. Work on that section, fill it out, and have fun.