To my mind, some setting/lore is
story and/or
plot.
For instance, if the backstory includes one or more PCs being on a particular trajectory (say, they are "chosen ones", or the village is under attack and the PCs are the villagers' only hope) then I think that is pretty close to a story or plot.
But some lore/setting is not a story plot. For instance,
Hardby is a fantasy city with docks, and shady merchants, and thieves, and a wizard's cabal; and its ruler is a magic-using Gynarch is not really a story or a plot.
I do think that emergent story, as opposed to largely pre-established story, needs space for contributions to connect, interact and yield the emergent. Which I think is what
@Hussar has in mind.