The following quotations provide examples of the use of “living world” and related terms – “living, breathing campaign world”, “real world”, “living setting” – in D&D.
Campaign Sourcebook and Catacomb Guide (1990)
The campaign is more than a game world or a clever plot line. It must be a place for the player characters to live, grow, and develop. For their character development to have any meaning beyond inflicting megadeath, acquiring zillions of experience points, and collecting vast, tax-free inventories of gold coins and arcane devices, the characters need a world upon which their actions, the outcomes of their adventures, can have a real effect; a world whose events, in turn, affect the player characters themselves.
When properly created, the campaign is a living, breathing, growing, and most importantly, changing game environment. It is a place that the DM builds, but which gains its life from the continued involvement of both the DM and his players. (pg 51)
Dragon #200 (1993)
When players become interested in a campaign world they want to know about its cultures, monsters, and important characters, and additional products make that possible. Players want more than just one evening’s adventure. They want to respond to happenings around them and such actions are part of what is necessary to make a world a living, breathing thing. (pg 82)
World Builder’s Guidebook (1996)
In this approach [Microscopic], the DM starts with a dungeon, town, or similar focused setting, and works his way outward… This method for world-building applies when you have a fragment of a world—a small province, town, or dungeon—already prepared, and you're trying to flesh out this one dimensional construct into a living, breathing campaign world. (pg 5)
3.5e DMG (2003)
If the PCs come back to buy more horses at the stables, you could have them discover that the man who ran the place went back home to the large city over the hills, and now his nephew runs the family business. That sort of change—one that has nothing to do with the PCs directly, but one that they’ll notice—makes the players feel as though they’re adventuring in a living world as real as themselves, not just a flat backdrop that exists only for them to delve its dungeons. (pg 6)
The most important purpose of a campaign is to make the players feel that their characters live in a real world. This appearance of realism, also called verisimilitude, is important because it allows the players to stop feeling like they’re playing a game and start feeling more like they’re playing roles. When immersed in their roles, they are more likely to react to evil Lord Erimbar than they are to you playing Lord Erimbar. (pg 129)
4e DMG (2008)
When characters leave a part of your adventure setting and venture back later, it should change in response to their actions. This kind of detail helps the setting seem more real and alive to the players. Monsters the party has killed should (usually) stay dead—the site shouldn’t just reset to the state it was in the first time around. But the second delve might well present new threats to the characters. Intelligent survivors of the characters’ first intrusion into their domain react appropriately, bolstering their defenses or evacuating the area. New creatures might appear in areas left vacant, such as predators drawn to shelter and prey opportunities. A living setting provides repeat play value and continues to hold the players’ interest. (pg 139)
5e DMG (2014)
If the adventurers come back to buy more horses at the stables, they might discover that the man who ran the place went back home to the large city over the hills, and now his niece runs the family business. That sort of change—one that has nothing to do with the adventurers directly, but one that they'll notice—makes the players feel as though their characters are part of a living world that changes and grows along with them. (pg 4) This is very similar to the quotation from page 6 of the 3.5e DMG.
