I began with working out how the Fairy Kingdom was governed (Queen and Council, loosely based on the style of government used by Queen Elizabeth Tudor). From there I worked out how towns and villages were run and that there were 22 different magical species in the Kingdom and that each had a representative on the Council.
This led to Council scenes which were noisy and needed the Queen to be able to steer so there wasn't a reversal to ages old enmity - for example, the dwarves and elves needed to be at a stage where they would at least talk to one another and put up with one another if only for the sake of the monarch they both served. (This led to background information about there having been many magical wars with the effect land had been made permanently barren in places as a result of having too much magic go through it and that nobody, not even the witches, really wanted a return to that state of affairs. This encouraged at least some co-operation between the species).
With a rough "feel" for magical politics in the Fairy Kingdom, I could then work out who would be likely to toe the line, who would have radical ideas the Queen would have to control (or occasionally use for her own purposes, usually to help get another bill through).
This is one thing I love about writing - how one detail worked out can lead to so many more details, fleshing out your world more realistically and leading to scenes/stories directly to add depth, particularly to a novel.