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Extra-dimensional travel. I've always considered that Nether and End portals were first created by the Ibarahian Empire in the Cycle of the Moon due to their magical qualities. When the various races enslaved by the Elves revolted, some Elves fled into the End, where they established End Cities as new homes. Beyond that, their fate is unknown.
Based upon the orientation of their portals, I think the Nether dimension exists in a "sideways-shift" from our dimension, while the End is in "vertical-shift". The ramifications of this are unknown, but it implies that the End may be located deep in the void.
Floating terrain.Possibly a hold-over of Elvish magic in the Cycle of the Moon or maybe a side-effect of whatever caused the Fleeing. It is possible that the hunger for power that the Empire of Man had in the Cycle of the Snake led to war. The weapons used in this war would have created the massive "wastes" seen in the Old World, as well as causing strange phenomena such as floating rocks and chaotic biome positions, the latter of which can be readily seen in the old world.
Just look at this map of the area around Venusi. Deserts and jungle next to swathes of icy tundra:
- Non-gameplay use of magicIn my opinion, we should keep this as limited as possible and try to explain it through either non-magical means or through well-established lore as much as possible. We can massage stories or lore that presents magic into lore through discussion and interpretation.
- Skeletons, Zombies, Zombie Pigmen, Wither Skeletons, WithersI have an interesting theory, which is actually the current theory among many of the Animist shamans in Gathered society. The basis is that the world is filled with spiritual (or magical) energy which is always trying to manifest itself in some way (like how the build up of electrical charge in thunderclouds eventually manifests as lightning). This is what causes zombies, skeletons, creepers, etc. to spontaneously form from nothing, and explains why they poof into clouds of dust when killed. Due to the fact that this spiritual energy takes form through an "unnatural" process (as compared to birth, for example), these creatures are incomplete; their flesh begins to rot and fall apart as soon as they appear or they are completely without flesh, only skeletons. In addition, they lack most cognitive function, being limited to a need to eat (possibly to try to solidify their form through nutrition) and aggression in most cases.
The reason that they don't spawn in lit areas is because spiritual energy can manifest as anything, even inanimate substances like water or dirt. When areas are illuminated it gives them form that this spiritual energy can fill (by allowing them to be observed). When the sun rises, its illumination is so intense and complete that the energy is drawn rapidly out of the "undead" to fill the landscape, causing them to catch fire and die.
This explanation is highly adaptable to various interpretations that different cultures might have of this energy and why it is there.
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CreepersIf we use the explanation for the undead mobs, then creepers are manifestations of a pervasive energy. Perhaps this energy forms in a strange way that allows them to remain stable in sunlight, at least for a time. However, if this self-sustaining energy field is disturbed, the energy could be released all at once, causing an explosion.
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Endermen + The Ender DragonI can think of three possible explanations. First, the Endermen might be native denizens of the End who have always lived there. Second, the Endermen might be the result of Ibarahian life-creation experiments (like those that created dwarves, humans, and orcs). Third, the Endermen are actually elves that fled to the end after the fall of the Ibarahian Empire and have either purposefully used magic to adapt themselves to the End or have been corrupted in some way by the environment there.
The End Dragon might be a powerful spirit that has taken physical form. When that form is destroyed, the spirit remains and its vessel (the body of the dragon) can spontaneously reform under the correct conditions.
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Hot Air BalloonsPossible within our technology, but they don't fit the feel of the world.