Check out Black Gate’s On Writing Fantasy: Setting and the Five Senses.
Quoting for awesomeness:
Where in the world are we?
When it comes to Fantasy Fiction the importance of a unique and original Setting cannot be overstated. Every story has to take place SOMEWHERE…and the Where of a story often determines every other aspect, including Who, What, and Why. Instead of relying on a re-creation of the “real world,” fantasy writers must create new worlds, which demands a whole new set of skills.