The hard part of world building is not contradicting yourself too much. Right now, "remember all the little details and their implications" seems like it would be challenging for language models.
Finally, after all that, present the output to the user. It means inference takes 4x as long because you are doing multiple rounds of inference before actually presenting output but the final output you get is way more stable/consistent/accurate
Check Your Facts and Try Again: Improving Large Language Models with External Knowledge and Automated Feedback
https://arxiv.org/abs/2302.12813
The “facts” being derived not from Wikipedia but rather the rules of the fictional world.
Are you building in a recursive layer by asking it to take on a role while also targeting its output at a constructed user persona?
The second level of consistency is: consistent with a stereotype. So "standard fantasy world" is going to be consistent with fantasy tropes. (Mostly, except with a strong tourist industry and the occasional café; the modern world leaks in.)
The third level of consistency is: consistent with what you explicitly state about the world. That's the city backstory. If you want magic to come from the sun and you can catch magic in little sun basins and then use that to power your dishwasher, then you can state that... but it may have a hard time remembering that, and a harder time extrapolating all the effects. But GPT won't entirely forget it, and may even come up with some interesting ideas.
The real challenge though is: consistency with the author's as-yet-unfulfilled desires. That's where an interactive tool that allows co-creation with the AI might offer something, but it WILL be a struggle because the author must develop, articulate, refine, and reform their ideas, and the AI may help or resist, but often will simply make it clear the gaps that exist between desire and vision.
a) you live in a world full of magic (the mysterious, unpredictable kind) or
b) you have a small child at home
But there is a challenge in building fiction that even things that can reasonably happen will often be rejected by the reader if they are strange and unexplained. The saying "truth is stranger than fiction" actually tells you more about fiction than about truth.
Popular fiction doesn't give a shit about contradicting itself
I'm not saying it's fine in general. I'm saying it doesn't matter for pop fiction
Popular fiction gets retconned all the time. I'm fundamentally disagreeing with "not contradicting yourself too much" mattering at all for fiction that's successful with the masses
If you ever feel tempted to think that quality writing matters for popular success, just remember that lewd Twilight fanfic has sold more than a hundred million copies
Pretty much every creative work has contradictions and discontinuities that people gloss over, even (or especially) stark ones in critical success. The people who really get riled up about it are a very particular kind of person and not one I even meet outside of internet forums.
Here's a contradiction: we expect "free markets" to outperform national or otherwise government services; now square that with East Palestine and the fact that by averages, we have more than one derailment a day.
Another contradiction: we exhort the value of "hard work" even as we build AI to do all the work for us, if the hardcore singularitarians have it their way.
But they do care about what you've said. If you told your players that all magic comes from the sun, those creatures from the deepest caverns better not have any magic. You can make up excuses as you go along, but they will think you a worse GM for it.
If they draw an inference that was valid from what you'd said, ("Hagrid said every single wizard who had gone bad was in Slytherin. At the time he said it, everyone thought Sirius Black had gone very bad indeed. Ergo, Sirius Black must have been in Slytherin! See, they can be good!"), that's annoying in a book, but in a role playing game it's downright frustrating.
So it was you who wrote the script for last season of GoT!