In the country of the story the writer is king. He makes all the rules, with the only reservation that he must not ask more than a readaer can reasonably grant. Remember, the reader is a very tough customer indeed, stubborn, dragging his feet, easily irritated. He will willingly agree to suspend disbelief for a time: he will go along with you if it is necessary for your story that you both assume temporarily that there rally is a Land of Oz, but he will not suspend reason, he will not agree, for any story ever written, that he can see the Land of Oz from his window. As a matter of fact, you would do well to picture your typical reader as someone lying in a hammock on a soft summer day, with children playing loudly near by, a television set and a radio both going at once, a sound truck blaring past in the street, birds singing and dogs barking; this fellow has a cool drink and a pillow for his head, and all you have to do with your story is catch his attention and hold it. Remember, your story is an uneasy bargain with your reader. Your end of the bargain is to play fair, and keep him interested, his end of the bargain is to keep reading. It is just terribly terribly easy to put a story down half-read and go off and do something else. Nevertheless, for as long as the story does go on you are the boss. You have the right to assume that the reader will accept the story on your own terms. You have the right to assume that the reader, however lazy, will exert some small intelligence while he is reading. Suppose you are writing a story about a castle. You do not need to describe every tower, every man at arms, every stone; your reader must bring his own complement of men at arms and towers; you need only describe one gardener to imply that the castle is well stocked with servants. In your stories, then, set your own landscape with its own horizons, put your characters in where you think they belong, and move them as you please.
The entire essay is well-worth tracking down, especially if you are in the company of a writer.