As a writer, chances are you excelled at English and history in school. Creating a world for your characters, be it real or imaginary, requires history.
If the world you are writing about has a history, that makes it much more real to the reader. It explains how this place came to be and why things are the way they are. Think back on your World History classes in school. Did you find it enlightening to learn about different countries and their cultures? Your readers will feel the same way.
Want to make the world pop for your readers? A well thought out/researched history is the way to go. It makes your world real to readers. From that, you develop government, laws, culture, the type of people who live there and how they go about their day. Life in America is drastically different from that of people in India, for example. Our laws and cultures are unique to the location. Even in America, several cultures exist. Think North and South, Midwest and Pacific coast.
If your story is based in the real world, the history of the location is already set. All you have to do is research to make sure you have a clear understanding of it. Of course, there’s the alternate-reality option where you take a real location and alter the history to create something new. In this case, it’s still important to learn the history so you can figure out the best way to mold it into your story.
If your story is based in a location that you’ve made up, you have free reign over the history. Anything is possible in a world you make up. This might not always be the easier option, though. Readers want to understand the place. They want logical reasoning for why things are the way they are. Is your world controlled by an insane dictator? It needs to be explained why that is so. For this reason, it may be helpful to write down key points to your location’s history so your facts are consistent.
Whichever your story requires, make sure to have your facts researched/thought out and consistent. For some, inconsistent facts may very well be the reason they put down an otherwise amazing story.