Everything for Everything in a Place

Once again, I'm going to be answering a question, and butchering a well known phrase in the process. This week's question is: 

"How do you set the tone for the places that appear in your story do billboards pop up saying enchanted forest or scary circus in Chicago rainy streets of Seattle or do you name them after you see the story. What comes first the city or just a random location and you build from there?" 

Well, over the years I've had a variety of peculiar locations. There was a city built up on the side of a mountain, a town that fell through a rift in the universe, and an underworld that included parts of basically every mythology I could find. On top of those, I've had ordinary cities where less than ordinary things happen.  

What all of these places have in common is that I made them up to suit the needs of the story. As a general rule, I don't use real places because sometimes I need to have a prison on a cliff by a lake, and Seattle or Chicago just aren't delivering.  

An interesting aversion to this is that characters are nearly always from real places. There is a long-running joke that one character will always be from Wilkes-Barre, Pennsylvania, going back to a script based on a short story, based on a Breaking Benjamin song. I haven't used that in a little while, but there's always the potential to bring it back.  

The point is, if my plot needs a creepy town in which to take place, I'll create a creepy town. If I need a city large enough to have an arena and host a gubernatorial rally, I'll create that too. A lot of them are based on or inspired by actual places. This is helpful for things like basic layout, population, and climate. I'll just picture it in my head, rearrange some things, and give it a new name.  

I'm now going to tell you the story of a particular town, in a particular story, because it's kind of a weird tale. Above, I mentioned a town that fell through a rift in the universe. This town was called McClellan, and it really existed. Apparently. At some point. It appears in my 1922 atlas, and nowhere else. Situated somewhere between Coeur d'Alene and Post Falls, Idaho, it seems to have dropped not only off the map, but also off the world. So who is to say that it didn't fall through a rift to another dimension?  

I actually turn to that atlas a lot to find town names that are no longer used, because half the time I'm terrible at naming places. I get so caught up in finding the perfect name that it just goes unnamed for half the story. I'll put in a little placeholder like [city] that I can replace later on.  

I feel like I'm really getting off track here. I guess the point of all of this is that I usually created a town, or a city, or whatever, to suit my needs. Although, the "creepy circus" mentioned in the question was the setting for my attempt at a Young Adult novel, The Midnight Carnival, and I definitely had that setting in mind before I figured out what the hell that story was about. It's about a circus, as it turns out, not a carnival, but the name sounded better that way.  

Does that answer the question? At all?  

As always, feel free to ask questions about any part of this madness I call a writing process. Yes, all of you. You can post anonymously or just with a name if you don't want to log in anywhere.