Everything Rel said.
Consider making a campaign world to be like drawing a map. Rough out the most general and obvious portions first. Detail major events of history that might come up in casual conversation ("
Ha'nt seen a arrowhead here in the plowfield since t'last war, boy.") or that are known to everyone ("
Every year on the Equinox we have Lord Smiggen's Day, to remember how he liberated us from the Illithid Threat.")
Work out broad details, and work up some lies. Really. Let your players believe, at 1st level, things that may be total fabrications they don't discover until 10th level. ("
What do you mean, Lord Smiggen was a Drow?") Don't worry about having all the answers to the big questions...in fact, let the campaign's direction answer them for you later, if you can. ("
Hmmm...the players keep fighting dueregar...maybe THEY were the ones who stole the statue of Lord Smiggen! Because...they hate the drow!").
Like Rel says, only detail what you know will be significant to the players, not what you hope will be. Don't waste effort on the royal family of Smiggen, if the players will never meet or know them. What's the line of succession for the Smiggens? If it's a factor in Lord Percy Smiggen's plot to overthrow the monarchy, worry about it then. If not, move on to other tasks, like that brother of the PC who shows up to drag him back to the farm. Don't detail the society of assassins any more than you need to. If the PCs just kill the assassin and never track them back to their lair, you'll feel awfully silly having made maps, motivations and endless stat-blocks (not to mention a custom prestige class).
You might think that's making things to vague...but let me assure you, when the characters starting using higher level magic, it's the only way to protect your sanity.
