I've worked on the setting a bit using Bat in the Attic's good how to article on making a fantasy sandbox and here's what I've come up with so far. I developed most of the concepts while being fairly unconcerned about the game system itself and deliberately left some things vague to be filled in later through play.
The game begins on the eastern frontier of the Kingdom of Moray, an aging realm ravaged by war and feudal politics. Moray Dukes vie for the King's favor amidst a generations old conflict with it's western neighbors. To the east lies the frontier, with the touch of civilization receding into the wilderness with the encroachment of dangerous humanoids and monsters once held back by the might of Moray's forces; now preoccupied with war in the west. The north is a territory of deep woodlands, craggy hills and cold mountain peaks swept clean by fierce winds and remains largely uninhabited by mankind.
On the border of the Duchy of Teith is a nearly forgotten town, Dunbarton. Once a bustling market town serving as a meeting place for travelers from far and wide, Dunbarton has fallen into hard times over the last few decades as hostilities turned attentions westward. While it still maintains a population of stubborn inhabitants, it's once fine taverns have long since been abandoned and many of it's fields lie fallow. Only those dwelling within the shadow of Dungarrow Keep live with any measure of safety from the deprivations of bandits or worse.
Occasionally, the promise of lost treasures or long buried secrets from ages past draw adventurers to this region. Many venture out into the wilds never to return while others escape with little but their lives and stories of things both wondrous and terrible to behold upon their lips. Recurring warfare, monsters, plague and strife has kept any one kingdom or group from becoming truly dominant and many secrets and innovations have surely been lost due to regular upheaval.
Thus far, I've got two major Kingdoms and a wild tribal type landscape, with the principle area of exploration being on the north eastern part of the map. The two Kingdoms have been in conflict with each other for long enough that it's had a lasting impact on the region economically as the Kingdom of Moray we know for sure has lost territory and resources in the process. Also mentioned is Town, specifically 'Dunbarton'. This will be the town that the players return to between their forays into the wilderness. I picture it as a once prosperous place but is now run down with homes and businesses standing vacant. The countryside around it has obviously seen hard times and many of the farms furthest from the Keep are abandoned and their fields fallow.
I haven't written up any details beyond that yet but I have a fairly good picture of them culturally in my head. The Kingdom of Moray is the most traditional medievalesque. A sort of mid 14th century northern european like Kingdom ruled by quarrelsome feudal lords. The Medine Principalities are a sort of mish mash of cultures in my mind, with a blend of cultures from all over populating them and like the city states of Italy are fiercely independent and boisterous, constantly pushing the boundries of their day. I imagine it to be a bit like the Byzantine empire; a crossroads of cultures creating a very diverse environment. You could probably find just about anything in it's markets. The nomadic horse people are kind of generic at the moment but I wrote a little about them.
Humans come in quite a few varieties, but most notably in the game area are those who come from the Kingdom of Moray, the Medine Principalities or the tribesmen of the southern plains.
The people of Moray are generally fair skinned with any normal human variation of eye and hair color. Their Kingdom is a feudal monarchy founded by an ancient warrior King to whom the first Dukes bent their knees. Concepts of duty, honor and feudal franchise are central to their character. While serfdom faded away centuries ago (a practice abolished by Bran the Reformer) most common folk are just that. The Courts of the Dukes are among the richest and most prosperous in civilized lands, boasting some of the finest artisans and performers known.
The Medine Principalities is a loosely knit confederation of independent city states. Collectively they are a great economic power, having established trade with distant lands and strange peoples. They are fiercely independent and their cities boast many great centers of learning and scholarship. Their cities are sprawling and beautiful and their markets bursting with exotic goods. The peoples of the Provinces vary greatly physically as it is a land of converging peoples and cultures and very diverse physically. The only thing they have in common is a stubborn love of their own autonomy.
The southern tribesfolk are a semi nomadic people who live off the land, raising their swift plains horses and following the herds of cattle that graze on the plains. Their homes are portable and the Tribes put down roots more or less seasonally in the plains, staying in one place for perhaps a few months at a time. They are a people of rigid tradition and do not like outsiders, though some have taken advantage of their neutral position with their neighbors and trade valuable horses and woven goods for things which they do not produce themselves. They are generally left alone despite the rich land they inhabit because of the Badlands which act as a buffer between the Tribes and their neighbors and those few who try and cross them without a Tribesman guide usually do not survive the trip. Their lands are sunny and temperate south of the Badlands, giving the people of the region a tawny to dark complexion and sun streaked hair.
That's about it for now. I wanted to give players some options instead of just being generic anglo dudes from a medievalish place.