Physical Setting and Plot

When a novel uses a fictional setting, (purely invented, rather than, say, summer of '81, in New York's mid-Hudson valley), they have quite a job on their hands. 
Of course, setting affects the entire novel, no matter what, but it's an especially big deal in a work of fantasy set in an imaginary world.  The characters may not even be human, in which case you'd have to decide how they sense, relate-to, move-through, and live-in their world.  How does that make them think and speak?

The imaginary world I'm building right now is not all that odd as fantasies go.  The characters are human, though not of this time, and they may not be on this earth, but their planet is largely like ours:  rocks are hard, water is wet,  the sun rises and sets.  It might be a low-tech and mildly dystopian future earth, but there are no locations in the physical landscape that are recognizable to the reader, so it might be someplace else entirely.

Because I'm starting with our own world as a basis, a lot of things can be taken for granted, both by me and by the reader:  the differences are what need to be brought to the fore.  Just as our environment shapes us, shapes the way we think, act and inter-relate, a fictional environment shapes the characters that inhabit it.

You'd find different behaviors on a Friday night in a quiet prairie town with a single stop-sign, than you would in a bright-lights / big-city sort of place.  Setting your novel in the real world (even in a fictional locale within that world) you'd select a location that enables your characters to do the kinds of things they'll need to do in the story you're telling.  On the other hand, your story could fall out from what your characters do in the setting you've chosen for them.  Either way, the environment must work with the story (even if it works with it by working against it -- a sort of fish-out-of-water story, like a mob hit-man working out of a sleepy town amid the Iowa corn).

When you select your fictional world (or create it from scratch), you have to produce a world full-bodied and consistent enough to be believable.  Consistency is a pet peeve of mine -- inconsistencies pull me right out of right out of my reader's trance.  Using a ready-made world (either ours, or one from an earlier book in a series) is the easiest was to solve these problems.  Every step you take away from the established world is another opportunity to put a foot in a trap or just slip entirely off the path of believability.

Creating imaginary worlds as a pantser-playing-at-being-a-plotter has its problems, though.  I've begun work on a novel that, now that I've gotten into it, is set in the wrong world.  My setting is too stark, too barren.  It needs to be larger, it needs to have forests and more people and a tradition of battered old children's tales.  I feel like I wouldn't be in this jam if I was a real plotter.  But I'm not a real plotter.  Trying to plot this novel is what forced me into this corner, and now it has me stalled.  What little I've written so far can easily move to the new richer setting because I got hung up when I needed the bigger world I didn't yet have.  I guess that's the upside of having made no progress:  when you're not producing even garbage, at least it saves you from making a trip to the curb on trash day.

The grappling creatures under the bed, the red-eyed furnace beast in the basement, the gold at the end of the rainbow, and the devourers-of-children who lurk in the dark woods at night:  these are the kinds of things I need, things that my attempt at plotting didn't show me.  And in order to have these fears and lessons and tales, I need to have beds and furnaces and rainbows and forests.  If this is plotting, then so be it, but it doesn't feel like plotting:  it feels like creating a world, a world where people were born and had childhoods and grew up.  It feels like creating a world where I'm privileged to get into someone's head and tell their story.