Greetings!
Well, there are several thoughts that I have on this subject.
Dragonblade makes some excellent points, of which I entirely agree! True, many people like to maintain the game world like a 12th century European analogue. That's fine, of course, and even fun. However, I don't think it is very consistent though, and on close consideration, numerous problems arise. Consider:
Point #1: Lets say you start the campaign with such a fixed, 12th-century European model, with Party A.
I would submit that somewhere in the campaign world, even in the larger society that Party A is familiar with, there would be a nobleman who would see the value of magic being applied to society in broader ways. It also follows that it wouldn't be extraordinary for such a nobleman to find a wizard or two, a cleric, and some wealthier merchants.
The organization, production, and application of magic throughout society may not happen in that generation, or even the next. Certainly, though, the availability of lighting, wishes, permanency, disease-healing, healing, restoration, mending, cold/heat spells, fly, and on and on--the variety is endless--in and of itself would utterly change the much-cherished 12th-Century European model in so many huge ways, the environment would be radically and dramatically different.
Now, take that great vision of magic being applied throughout society, and run with it out through several generations. Think about the many huge ways such use of magic would effect society. Think about the effects three, four, five generations down the road.
And yet, in the same campaign world, five campaigns later, with Party E, the campaign world hasn't changed a bit. Everything is the same artificial 12th-Century European model.
Point #2: The application of magic in a variety of ways would certainly change the speed, quality, and modes of production in many if not all professions. Such productivity, would effect so many different things, like the following:
(1) Hot/Cold running water
(2) Sewage/waste removal
(3) 24-hour lighting
(4) Heating/Cooling
(5) Cold Storage
(6) Cooking enhancements
(7) Magical Travel Enhancements
(8) Magical Communications Enhancements
(9) Disease/Healing/Resurrection
(10) Wish/Building spells
(11) Enhanced Agriculture/Production
(12) Enhanced Animals
All of the above, just to start with, would change the productivity of society in nearly every way. The increased production would result in greater resources, greater wealth, and a changing of society's disposable time and wealth. These factors, in turn, would combine to create a driving force of magic, culture, and economics that, given even a few generations of dedication and passionate effort, would utterly change society.
For example, though 24-hour lighting, by itself, does not equal a full-scale industrial revolution--but it does equal the easy access to "electricity". The impact of easy and mass access to 24-hour lighting by everyone in society cannot be underestimated. It may not obviously have an immediate industrial effect, but it does mean, that for whoever can imagine and dream, and improve and use that lighting, that society is not restricted to the natural lighting and limitations of daylight. Many different societal nuances and enhancements can be imagined with just 24-hour lighting. That single factor alone can change the way society thinks, what it values, and how it spends its time.
Armourers, weaponsmiths, craftsmen of all types, can now work in three shifts. The same people aren't losing sleep--they can afford to hire more people, to increase production, and ship goods further away to meet growing demands in greater markets. This in turn, creates more wealth, becasue there are more skilled citizens making more money from professional skills. This in turn means that there is a greater degree of disposable income, which can in turn lead to new entertainments, 24-hour nightclubs, theaters, whatever, as new buisnesses arrise to meet the new demands of increasingly prosperous citizens, with more time and more discretionary income to spend. This in turn changes the nature of society even further, as people can also afford the time and wealth to become more educated and knowledgeable, which in turn adds to the societal force of change on a broad front.
Do you see? Unless the campaign world is forcibly kept in a fixed time-bubble, where progress is impossible, given ten generations from the beginnings of a decently professionalized and organized town, all of society would be dramatically different from the 12th-Century European Model.
The fact that these societies always seem to remain in 12th-Century mode, is thus inconsistent with the access and application of magic. Thinking through these concepts would change the society of the campaign in huge broad ways, that can be very interesting and fun to explore!
Many people seem very hesitant to apply these concepts, even though that the availability of magic seems prima facie to utterly change things, and yet, because they are uncomfortable with such, they keep the same paradigm, regardless of how inconsistent--even with the stated magic levels--the campaign world would thus be.
Just some thoughts!
Semper Fidelis,
SHARK