DrunkonDuty
he/him
Eh. The players should have just as much control over the setting as the referee has control over the characters.
I think getting buy-in from the players is important to everyone having a fun game. And one way to get that is to ask players to contribute to the setting. Exactly what this looks like varies depending on the game and the players.
e.g.: for a no holds barred supers game I'd expect more contribution to the setting:
a player comes to me with a character concept like "an alien, part of a secret invasion force, but has repudiated their people's conquering ways and wants to help humanity" it'll turn out not only do I have aliens, but they're doing a secret invasion. I certainly wouldn't refuse their character suggestion.
Another player comes to me with a concept for their PC's nemesis and it's the ghost of Dracula... suddenly I got vampires and ghosts too.
On the other hand if I wanted to run an L5R game focussed on courtly intrigue I'd knock back both the above suggestions. But someone who wanted to play a self-serving, ambitious samurai who'll stop at nothing for power - that would be ok as long as the rest of the players were ok with it and we could find a way for everyone to be on board with it. (This particular example runs the risk of taking over the whole campaign so it requires broader agreement than my supers examples.)