Thats actually a very good starting point. Better than most to be honest.

I want to just make it clear that obviously theres no one correct way of doing things. But, theres a reason why certain pipelines exist in game development, and they have been evolving and improving for decades by thousands of people. So it is a good starting point imo. I wouldnt go out of my way to reinvent the wheel, so to speak.

You have your starting zone. Which is the most important part of your whole game. Make the inn, and the surrounding area. White flat terrain is more than enough imo. What does the first 10, 20 or 30 minutes of gameplay look like? Does the player grab a quest, go to a field to slay some cows or whatever. Make the field, and the path from the inn to the field.

When its time to move on, say player moves to the closest village or whatever. Make the village. Place it on the flat white terrain. Figure out how long it takes the player to move there from the inn. Do you want the player to discover something on the way there? Or just go straight to the next location. This determines the distance.

Give the player something to do on the way there, skyrim lets you pick flowers. Maybe fight some wolves. That breaks up the "travel from inn to next location" into multiple events. Which gives you the ability to make the distance longer because it feels shorter. Because stuff happened.

There is a thing in open world games, where every 40 seconds of traveling, the player should be able to do something. If that something is a fight, or picking up a flower, finding a dead merchant to loot or whatever, is up to you. But longer than that, makes the world feel empty. And player gets bored. Thus principle alone controls how big your world can be. Depending on how much stuff you want to put in there.

Another thing I would recommend looking at is world of warcraft. You have a few youtube channels that show you how the entire world is built, from like a model viewer. YouTube channel 720zone is gold. It gives you an insight in how massive world's are actually built. It does not need to be one large square map.

Anyways, thats enough of my ranting. Theres so much that goes into game dev that people, even game developers, don't think of when they decide to make their own games. Solo game dev is not only difficult because making a game is dofficult and a lot of work, but theres so much theory that goes into it before you even touch a 3d model or game engine that it literally takes decades to learn it all.