If you only have a sketch of a little area and haven’t planned out the rest of the world, don’t worry– that’s one of the best ways to start. You shouldn’t waste your time working up beautiful maps and histories long in advance, unless you have the time and get a lot of pleasure from it. For a good overview on detailed world building, this wikipedia article  has a lot of things to consider, though it’s tailored more towards authors and people working from big to small.
Why work on a setting?
A good place to start is to ask yourself why you’re bothering to work on the setting at all. Having a basic concept of your world is important, if only so you can help them make characters who fit the world. Remember though that you don’t want to bury people in trivia. In the big picture, setting is an angle — a way to add tension and deepen the engagement of your players. From Chris Chinn:
Why is it some games can give you 1-4 pages and sell you on the concept and give you enough to roll with, and other games have 200 pages of made up history that does nothing for you?
The trick to setting is that it has to be meaningful. The meaningful bits are what you load context with, that makes any given scene or event powerful instead of mundane. These are the hooks with which players build stories and meaning for play.
Life around here
The first bit of setting you’ll want to establish is the local area. There are many good ways you can approach this– and, as ever, stealing is faster than building.
If you’re playing in an established setting, you can ignore 95% of that huge book and just read up on the specific region, kingdom, or planet that you’re set in. In most cases, this is just a few pages– often just enough to spark ideas that you can develop into your own version of the world.
One good trick to make your world feel realistic is to remember the weather. Unless I’m playing in Shadowrun’s Seattle, I rarely remember to change the weather– it’s always endless clear summer days. Bringing the weather in can be a great way to alter a battlefield or change the mood of a scene. One great tool is Drow’s Random Weather Generator . Now your spring days will feel like Spring.
Another easy alternative is to peg your weather to that of a real city, and just keep up with it on the web. Like, say, Chipinge, Zimbabwe . If your game is set in the real world– it’s pretty easy to look up and borrow the landscape and environment of that city. For sci-fi, you can take the weather somewhere “normal” and make it extreme– take Baghdad’s weather, add 20 degrees each day, and change all rainfall to sandstorms to get weather on Tatooine.
Another great setting source to borrow from is your life experience. If you lived in Colorado for a few years, you can pattern your weather after your time there. If you play in a game I run and it’s an oppressively dry, hot summer day… welcome to a disguised version of my hometown. You’ll know you’re right if the winters have only sporadic rain but constant dense fog.
The characters will probably treat the town where they start as home base for a while. Inkwell ideas has a good post on design considerations  for the home hamlet or village, particularly for fantasy settings. The way the village looks should be influenced by the weather and landscape you picked above. Fierce winds and bitter cold winters encourage substantial buildings to resist the chill, while an area with sparse rain might be a tent city that picks up and moves to the next watering hole when the current water supply runs out.
If you want the town to be more than a rest stop, you’ll probably want to build in some conflict. If you already have some NPC ideas, try creating faction leaders and putting them in conflict. Chris Chinn’s conflict webs  is a great tool to get you started. If you want to make the village a real focus for play, run the town through Levi’s broken places  situation maker. Now you can start hinting at the ills that need addressing. After a few sessions they’ll probably be ready to right the wrongs in the sleepy village. For a town full of intrigue, instead his long knives  worksheet is a great way to keep track of who has leverage over whom.
Now that you have a home base and a vague idea about the weather and the layout of the nearby region, look at your first adventure. Check out the adventure setting: is it a dungeon built into the side of a mountain, a vast city in the middle of a great desert, or does the adventure assume pastoral hills and thriving towns? How does that match the home base region you designed above? If your adventure needs a mountain, then it’s time to add a mountain to your map.
Similarly, if there are interesting aliens or monsters that you want to use, make sure you add swamps (or whatever terrain they inhabit) to your map. This can be done over time, as the PCs explore more of the area– again, you don’t want to spend the effort to create a huge map when the players only get to experience a tiny portion.
Local Legend and Rumor
A nice way to tie things together is to take the NPCs in their comfortable village and have them tell the PCs what they’ve heard about the area. If an goblin tribe lives in the forest, have the NPCs talk about Old Man Morrison’s disappearance in the woods right in front of the PCs. When the PCs plan going along the south road through the swamp, have one of the rangers show them one a giant rat pelt he bagged on his last journey into the swamp.
A good thing about this method is that it’s okay if the NPCs aren’t always right right. If it takes the PCs five levels to get to the swamp and you want to change what’s there– well, why did they trust a stay at home fool anyway? Time gives you another excuse: maybe the swamp lizards were there, but something chased them off. Something that has a taste for PCs too…
World Building and You
GMs tend to build a lot of worlds over their lifetime. Even GMs who only play in published worlds still have to pick where the campaign is set, and which information gets screen time.
What tricks do you have for planning out an area quickly? How do you remember to bring up the weather, foreshadow local threats, and engage the players in their home town? Please share your tips in comments.