If you're making it up on the spot, then it is the only way that it happens.
For example, if the PCs have wandered through a village 5 times and the last time through they gave a man who was down on his luck 200 gold.  The man used it to buy a building and start a tavern and now the village which previously did not have tavern, has one.  That's not the sort of information that travels from town to town.  In a living, breathing world, that was created off screen and the next time the PCs come through, they will discover what their actions wrought.  However, they may never go through that village a sixth time and may never find out.  If the DM makes it up on the spot, though, it's because the PCs did go through the village a sixth time and the creation is therefore, part of the PC bubble(that which happens around them.).  Things created as part of the PC bubble are not part of a living, breathing world.