What if I want to play a game where magic isn't the deciding factor in every battle? D&D often sweeps these things under the carpet. As you say, the fantasy D&D castle would not look like a medieval castle.
But, what if I want more traditional fantasy? In D&D, as soon as you start scratching beneath the surface, you realize how poorly D&D does traditional fantasy, at least out of the box. Sure, you can start making all sorts of changes to the ruleset to make it do that, but, that's kinda the point. You have to radically alter a lot of the ruleset in order to do it.
Well, I think there is the alternative to AD&D (and probably 3E) which (in my view) Basic (but not Expert) adopted, and 4e has also adopted - which is to treat the sociology and demography of the gameworld as backdrop rather than as a game element that is to be used on a par with the rest of the game mechanics.
(Yes, I'm repeating myself from upthread. But I really feel that this is an underappreciated difference in the contribution that the gameworld makes to play!)
D&D, as it's presented is not this high magic, magic solves all game.
Looking at various settings - Forgotten Realms, Greyhawk, etc. the settings are presented as medieval Europe with a veneer of magic layered on top. The problem comes when you scratch below the surface, it's not hard to start seeing some really glaring incongruities.
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Take something as simple as continual light/continual flame (depending on edition). Access to PERMANENT light sources would have an enormous impact on a setting. But, why do we have these spells? Well, because our adventurers go down into dungeons and carrying a sack full of torches is a PITA. So, we have Continual Light. Makes dungeon crawling that much easier. The broader effects of cheap, permanent magics are simply hand waved away.
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The magic system is dictating my setting. I can't ignore the issue if I want a believable setting.
I think believability in fantasy settings is grossly overrated. Tolkien's Middle Earth is not remotely believable. The Shire has material living standards comparable to 18th or early 19th century England, although the latter was a centre of world commerce and productiong and the former is a small, autarkic community. Gondor appears to have material living standards and economic power at least comparable to the major European kingdoms of the high mediaeval period, without any sort of comprable economic base. Where are the villages and towns that support Minas Tirith (they certainly don't seem to be passed through during the Ride of the Rohirrim)?
Exactly the same sorts of points can be made about REH's Hyborian Age, which is a self-conscious pastiche of various times and places intended solely to provide an evocative backdrop for the Conan stories.
I think there is nothing wrong with handwaving. In a game system which includes spells like Continual Light, all it needs is an understanding at the table that no one will push the boundaries that might make the handwaving fail to do its job. (Much like the understanding that no one will theorise
too hard about the dungeon's ecology, or the Underdark's impossible economy - how is the Vault of the Drow richer than any surface city given its such economically umpromising geography? - or about where and how often their PCs go to the toilet.)
Once the game makes the setting another element in the game that the PCs are expected to use alongside (or as part of) the mechanics, then I agree that things change. This is part of why I'm not a big fan of domain-type rules, at least of the classic AD&D/Expert variety. They suddenly make sociology and economics matter to the game, bringing an end to the handwaving and encouraging players to break the gameworld in all the ways that you (Hussar) are talking about.