How I Go About Constructing Setting (Sci-fi/Fantasy)

I posted this in a thread recently, but thought it would make a cool blog, so have adapted it.

For me personally, when laying the groundwork for a story, I almost always start with something approaching a grey nothingness. Usually, what I find as the story develops is that this stops being interesting right at the point I say 'It's a grey nothingness'.

Readers are clever and I think most would call that a cop-out, because ultimately a grey nothingness takes no time to develop. For me, setting and how it's populated should always reflect the internal conflicts of the characters. I actually wouldn't be able to do that with a grey nothingness unless there were no internal conflict and if that were the case, I would probably declare my story broken and start again.

The poster I was speaking to at the time made an interesting point that if it isn't a grey nothingness, then you'll have to populate it with pixies and so forth, but if I were building a limbo (as he was doing) of my own, I wouldn't go anywhere near those fantasy archetypes. So, coming back to the point in the previous paragraph, if you're wondering what to fill it with, this is my personal process:

What is my character's inner conflict?
Let's say, for example, his wife was killed and he holds himself responsible, but now he's in Limbo he might have a shot at redemption. Maybe she's at the inn (that the poster told me was in his idea) and he needs to get there, so his internal conflict is primarily guilt, followed by regret, self-loathing and hopelessness. I'd then list those facets out like this:

Guilt
Regret
Self-loathing
Hopelessness

Using each as a header, I'd start listing things that are either the cause or the reflection of each, so:

Guilt
A police officer staring at you.
A parent punishing you for stealing cookies.
I'd then move onto more esoteric concepts like:
Mankind's exploitation of nature.
Dishevelled hobos with no place to sleep and nothing to eat.
Inadvertently offending someone at a party.
[insert a dozen more things that have the propensity for guilt]

Obviously, the list would be lengthy for each aspect I'd want to reflect.

The next thing I'd do would be to find commonalities between the different concepts, locations and objects on the list. Keep those that gel together, ditch those that are extraneous.

Then, I'd begin designing my world based on those concepts. Introduce some interesting rules for that world and find some way of making any aspects that sound a bit cliche unique.

What I'll have then created is a place unlike any other and within which every element of my character's internal conflict is evidenced in metaphor. This would allow me to, in every passage of description and circumstance, increase the emotional efficacy of my protag's plight, with very little effort. Conversely, a grey nothingness would deny me any and all expression of character for any time my protag or anyone else spends within it.

I read 'Surface Detail' by Iain M. Banks recently. What blew me away about it is just how fantastically well Banks does this. Scenes of loneliness are played out atop isolated high-altitude mesas, scenes of high action and viscera in spinning, noisome carnivals of alien life.

That's just the way I work, but my honest advice would be to try and avoid 'A grey nothingness' at all costs. Try writing the back cover synopsis for that and you'll see just how much less interesting it is. And so ditto goes for any place without defining, reflective, original set dressing.

I hope that's been helpful to you. Everyone works differently and this is just how I go about things when writing sci-fi. I cannot speak for anyone but myself.