One of my works in progress is not based here on Earth. Where? It is hard to say, it is a world that is similar to earth, however I wish to have free rein when it comes to magical effects that are neither present nor possible here on Earth.
I find that mostly when I write I trend towards fantasy, I think for this reason. If I write myself into a corner, I can invent a magical effect to get me out. This is not a good idea for me to do this often as it tends to make some of my pieces unbelievable which in turn affects the way that people view my writing. But for the novel, where my main character is a herbalist, the healing powers of some of the herbs and other items will cross the line from holistic healing to magic. That is part of the story, so on another world it shall be.
I am finding that I am spending a lot of time developing my characters and not as much time creating the world, rather letting it build naturally as I go. It is working well so far, I am careful to not make a completely alien world, just one that differs a bit from life on Earth. I enjoy creating a new world along with my characters and plot, it lets me open up my imagination more and allows me to better "see" the novel as I write.
Which do you prefer, creating your setting (or world) as you write, or planning it out beforehand like a character's description and back story?