A World By Any Other Name

So, any good fantasy story, or story in general, needs to take place somewhere. It has to be grounded in some world. This place might not be revealed to the readers, but the writer, as far as this fairy tale is concerned, ought to know a thing or two about it. So what I need to decide is, is this place supposed to be parallel to our own in some way? Traditionally a lot of fantasy and fairy stories do this, where they inhabit a land close to our own, but just beyond the borders of general knowledge. Or in other cases, the land is completely foreign to us and has no relation to Earth and any similarity is pure coincidence. Both are valid options. What I like about having a world that resembles ours, say some period before the Age of Exploration, is that there are still corners of the world that haven't been explored and charted. Imagine living in the middle ages, or the classical age, when your country was the bastion of civilzation, and just beyond the sunrise the world just ends, or worse, is full of dark places that none dare go. Imagine a world full of monsters, and mystery. It was this unknown that made these legends and myths possible in the olden days. Which makes it cool to think that any fantasy world you create might simply be another part of the world that civilizations in our regular, documented history just haven't found yet. You can make all sort of extrapolations, like "these people were the ancestors of the Gaels" "this kingdom was here before the Persians ever set foot here". It's filling in the gaps of history, assuming there are gaps to be filled. That is why I find the idea of a world parallel to our own (but just a little more magical), or part of our own in a forgotten place at a forgotten time, to be so appealing. In this case, what stumps me is who are these people? What are their names? How do they resemble us? How do I figure that all out? The alternative is that I make everything up without delving into older stories and myths and create my own world, completely emancipated from us. The plus of that is I don't have to consult anyone for it. If I want to call this city suchandsuch and that person soandso then I can and it won't matter. The problem with that is I have no idea where to begin, and might end up making something that will resemble our own just because that's all I know. This World is not in the future. The future means less mystery. I want a world where oaths and curses were just as potent weapons as steel and fire. Where people feared and revered nature because they knew it was inhabited by spirits. Where the world was a wide and scary place and reason hasn't completely eradicated the possibility of ghosts, and dragons and hydras and goblins and witches and valkyries and spells and rivers that lead into the underworld and all the trappings of an overactive human imagination that lead to marvelous yarns. So, it's not in the future. It's not right now. It's in the past. But if we are to use some place in history, then where? And when? It's a question of to what degree do I want this world to resemble ours? Just looking at a celtic myths and legends book the other day, it was full of fantastic names like Cuchulainn and Balor and Nuada. Names I really like, but it also feels kind of like cheating if I just took those completely out of their context as well. I'd like to invent new names if I can. But it's hard inventing names that can sound authentic and organic, and not sound overtly like something the writer made up for his fantasy novel. I need to give the sense that these people, this world exists without our witnessing it. That long after the last page is turned, life in this place will go on and many other adventures will be had. It's hard doing that without borrowing a thing or two from already existing yarns. Not that I object to taking old stories and reinventing them. Hell, that's what everybody does. But I fear that if I do, I'll do it clumsily. There needs to be a seamless quality to it. You can't have one person named "Brie" and another person named "Alshkabazar" both living in the same town and nobody asks why. It's really stupid and I hate it when fantasy stories do that, without paying any attention to continuity. It's disrespectful to the world you create and to the readers. Plus, the names usually sound really fake. So, what to do? Should I borrow from some very real sources, as far as names go (the stories I'm using anyway, that's for certain), or should I make up some new ones?