Or: if I want my reader to believe in the fantastical…
Willing suspension of disbelief is a key part of the interface between the writer and reader of fiction. If your reader doesn’t believe in your story on some emotional level, there’s really not much point. Likewise, most speculative fiction starts off with a believability deficit since it’s A, fiction. B, fantastic in some way. The one possible exception to this is true hard science fiction where the idea is to create a fantastic element that is potentially real, or even likely, in the future.
The setting component of this is world building. It is at root, both very simple and terribly hard. The basic thing you have to do is create a magical what if with internally consistent answers. Nothing loses a reader more thoroughly than a world that’s clearly self-contradictory. Yes there exceptions. Alice in Wonderland, other dream-logic books. There are always exceptions in writing, but it’s a good general rule.
A what if example might go something like “What if spells are real and performed by computer code?” You the author have to think the what if through and figure out all of the possible repercussions, both immediate and secondary. Then, once you’ve constructed a logical structure for your magic, you need to set out to game the rules, by which I mean find every possible loophole, or make sure there’s no wishing for more wishes.
This is for two reasons: First, your reader is going to be doing it and you need to find any obvious flaws before they do and fix them. Second, and more importantly, as you construct your story, you’re going to need to put in surprises and reversals, and one of the best ways to do this is to “break” the rules in such a way that your reader is surprised and yet feels that they should have seen it coming and that the rule breaking is actually an outflow of the rules and not a mistake in their construction. Breaking the rules is a huge part of fiction in general, not just world building, and worth its own post a bit later on.
The basic process I use for world building is to come up with a broad general what if. WebMage: What if spells are done by computer code? Then I figure out some broad ramifications and frame them as sub what ifs. What if all sorcerers were hackers? What if computers then became magical creatures and familiars? What if the universe were organized like the web and multiple worlds could be visited by means of a magical internet? Each of these generates a chain of consequences and further questions. As I’m plotting, I frame the what ifs mentally and then write out my answers to create a basic narrative. There’s much more to it than that, but this gets at the basic process.