Nova Terra is a virtual fantasy world comprised primarily of the split continent of Angoril. At a pre-industrial level, Angoril's society in some ways resembles the real world pre-industrial age of the 1600-1700s in terms of technology, economy, and political structure. There are countless different races (both humanoid and non-humanoid) who inhabit Angoril, each with their own history and culture, though this, of course, depends on their degree of self-awareness. Some of these races are playable and others are native-only races. The major political entities on the continent are two different empires associated with the human race in the north and the demonkin race in the south, which at one time were united but split after a civil war. It is the friction between these two empires that forms the primary conflict within the game. Players can start in either location depending on their race.

An unknown number of years have passed in Nova Terra since the world first began, most lost to the mists of time. The known history of the world consists of four eras.

The Gods' Era is the earliest period of recorded history. It was a time when warlords rose and fell, and massive creatures roamed around eating everything in sight. Countless powerful people and creatures died during that time, leaving their inheritances behind. During this time, the basic civilizations began to grow as different small tribes of various races joined, intermarried, and formed alliances. During the Era of the Gods, it is said that the Gods played a monumental game with the races of the world. They chose members of the various races to become their avatars and blessed them, granting them fantastic power and pitting them against each other.

After the Era of the Gods powerful elemental dragons emerged and brought the land under their spurred heels. They enslaved the other races and waged massive wars on each other. Most of the gods’ avatars had fallen by this point, and the dragons plundered the inheritances for their own followers. They took the inheritances of the chosen and granted them to their own chosen. The dragons began to behave like the gods before them, sitting high above the world while pitting their chosen against each other. But the races couldn't be kept down forever, which led to the Third Era.

The Imperial Era started when two powerful chosen, a demonkin and a human, defied their dragon masters after falling in love. Leading a massive slave army, they rose up and defeated the dragons, unifying the entire world under the twin banner of humanity and demonkin. Their son was the first emperor. The Imperial Era was an era of peace and prosperity, but under the surface discontent and division brewed. The first emperor was half human and half demonkin. His father was demonkin, his mother was human. But his children and every imperial child after them had either more human blood or more demonkin blood. The intrigue this caused led to conflict between the two races, and the empire was torn in half by a bloody civil war. The demonkin took the southern half of the continent, and humans took the northern half. Just as the dust settled and the two kingdoms entered an uneasy truce, the first travelers arrived, signaling the dawn of a new era and the end of The Imperial Era.

The current era is the Travelers' Era. Players have entered the world of Nova Terra, forever changing the balance of power. There have been seven world events since the beginning of the Travelers' Era. The sixth event was the Crusades of Flame and Shadow. The most recent world event is Sins of a Golden Dream where stone dwarves emerge from underground and attack people on the surface.

The primary continent of Nova Terra is Angoril. Politically (and geographically) speaking, it is split horizontally in half between the Human Empire to the north and the Demonkin Empire to the south. Each empire is then divided into four duchies. The southern and northern ends of the continent are temperate and have rotating seasons, but the four central duchies are closer to a tropical environment with alternating dry seasons and rainy seasons. The far north of Angoril is a frozen land of tundra and ice-covered mountains rising like dragon’s teeth into the sky.

Apart from the continent of Angoril, there are three smaller continents introduced in various patches, and each has a different theme. Rasyn, off Angoril’s eastern coast, is styled after Japan’s Tokugawa period. To the north lies Gerund, a Viking themed location that houses numerous barbarian clans, while to the south is Moa’techa, the Mayan-themed empire.

The Human Empire occupies the northern half of the continent Angoril. As the name implies, it is dominated by humans, but many other races also make the empire their home. In the center of the empire is a large, magnificent city floating above a lake. This is the empire's capital. Though there is a ruling emperor, much of the daily workings of the empire are handled by a quagmire of a bureaucracy, which is overseen by three ministers. These are the Interior Minister, the Minister of the Left, and the Minister of the Right. Additionally, there are four dukes that manage and protect the four duchies of the empire:the Cloudwave Duke, the Ironhold Duke, the Great Plains Duke, and the Dirgehold Duke. Then there are the nobles, who traditionally have been the ones to allow an individual to become the emperor but are currently waning in influence.

The Demonkin Empire controls the southern half of the continent Angoril. In the center of the four duchies lies the empire's capital city, occupying the interior of a massive pit.