1. A completely fictional world
2.The real world, but with fantastical elements (eg., witches in LA)
3.The real world with NO fantasy
Knowing which category yours falls into will help you determine which questions you need.
Yes, but not in as creative a sense. For stories based on the world we live in, outline everything that pertains to your character. Your character can't escape being affected by their surroundings, and they need context.
Are there economic divisions (e.g., upper/lower class, prejudices, poverty)? How do those affect your characters’ relationships?
Even if your characters aren’t actively involved in politics, what happens will affect them like it does in our world.
Once you’ve established what the powers are and whether your characters have them, ask: How does my character’s power (or lack thereof) affect their daily living? Their relationships? Their worldview?
How’s the climate where your story takes place? As your characters live out their plot, what’s the weather like in the backdrop?
This can be telling for your characters’ positions in society and connections to foreign lands.
Your characters will likely share many similarities if they live in the same area, but they may come from different cultures. How are these differences handled?
General trends change. What are the biggest topics of conversation while the story takes place?
All worlds have some structure AND some chaos. Not everything makes logical sense, but most things fit together.
Be careful with parallels, especially in regard to ethnicities and identities. Always write with sensitivity, respect, and care.
You don’t need to (and shouldn’t!) dump every detail into your MS, but the more you weave in, the more immersed your readers will be and the more context you give your characters.