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You can set a story anywhere. The challenge is not to make it consistent with our world but to make it self-consistent within itself. And I think this is a universal literary problem (and therefore...
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#3: Attribution notice added
Source: https://writers.stackexchange.com/a/24866 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#2: Initial revision
You can set a story anywhere. The challenge is not to make it consistent with our world but to make it self-consistent within itself. And I think this is a universal literary problem (and therefore I don't think this question belongs on worldbuilding). All stories take place in what Tolkien called a sub-created universe. Even the most gritty realism is a fabrication that takes places in a simpler, neater, less random universe than our own. For example, the kinds of random chance and coincidence that happen in real life all the time do not work in stories. Readers feel that these things are cheats, that they violate story rules. Story worlds, even without magic, obey their own rules of causality and probability. So, you can construct a world such as you describe. You simply need to make it a self-consistent story world. It needs to have its rules, they need to be consistent with each other, they have to accord with the general rules of story worlds, and you have to stick to them. But these are rules about shape, not about content. The reason that you see so many fantasy stories set in pseudo-medieval worlds is that it is easier for authors to borrow these existing tropes than do the work to create something new, and readers have less work to do as well, because the rules of these worlds are already well known to them. Establishing a new trope is much harder work, but it is not restricted in any way by the rules of existing tropes. It is restricted only by the rules of story.