The Lore of The Floating City
In the beginning, there was nothing. The macrocosm was absent of space and time. Then, the void exploded into existence.
(It was a void before the explosion, and it was a void after. The difference is that now the void existed. Don't ask me to elaborate on this. I will not, not because I don't want to, but because I don't know how.)
Pulled apart by differing constants and potentials of creation, the void fragmented into three different realms. They were the overworld, the nether, and the end.
Each realm had its own set of characteristics. The nether was a hellish place that proved unfit for sustained life. The overworld was what humans would find most "normal." The end, despite its eerie ambiance, had the least restrictions of the three.
The three realms were mostly desolate, devoid of life. However, various spirits and watchers presided over them. Sometimes these beings would collaborate; most often they went their own way and left each other to their respective domains.
The void went on existing in this way for much time: barren, with the occasional non-human entity passing through.
The First Players
Then, during one of the many epochs that had passed since the great explosion, something odd happened. Players began to enter into the void. They would simply snap into formation without any trace of origin.
Over time, as the player count grew, settlements of them formed. Initially, the players established utilities: pathways, infrastructure, and "tutorials" of sort to help settle in newcomers.
Eventually, they built simply for the joy of creation. They built houses, cities, and great landscapes. They created arenas for games. They called this place their home.
The leaders of one of the larger settlements lovingly gave the void the name of The Floating City.
The Madlands
There are some players, though, that cannot fully comprehend the true fragmentation of the void and its many realms. The complexity drives them mad. To cope, they enter into a dream. This dream is of their own formation and shared between all other players in it.
As the players go on to exist in the dream for a longer time, they grow wise and begin to understand the true form of the void. Players, upon unlocking this realization, can exit the shared dream and join others in reality.
Those players who have yet to wake are dubbed mad, and so the shared dream has been aptly named the madlands.