I agree with Vita and Rin. We don't want to set up a specific plot. The setting should just be a place where our characters are. With that said, it should be specific enough that we don't have a rain forest next to a glacier, but broad enough that any kind of characters, sci-fi or fantasy based, could fit in. My suggestion would be a sort of hodge-podge village. It has houses, a school, and a mix of whatever aesthetics we need to accommodate the characters. We could say that all resources that our characters would need to function - guns, magic  scrolls, medicine, jet fuel, whatever - could be available through "travelling traders" in the village. This will let people make whatever they want to make. 

I've participated in RPs of this nature before, and they can definitely work so long as the players are willing to sacrifice cohesion for freedom. The plot derives from the interactions of the characters alone, and I would recommend players having a single primary character that they focus on, but can be free to introduce temporary "antagonist" characters to mix up the status quo a bit. We don't have to do this, but I am just speaking from experience of things that I have seen work.