This is adapated from standard Powered by the Apocalypse practice, specifically Monsterhearts 2 by Avery Alder

Start by getting input from the players about what setting details are already implied or required by their characters. If there's a druid, does the game need to be set near a heavily forest area? If there's a triton, does it need to be oceanside? If there is a paladin, is there a paladin order in the town? Let the main characters serve as a starting place for deciding where the game will be set.

Collectively establish a vague idea. Then as MC, turn to the player on your left. Ask them a question about the setting. Proceed to the next player, working your way clockwise around the table. If after one round you feel satisfied, move on. If it feels like your setting is still bare and underdeveloped, go around the table once more. It's fine for people to interject ideas and riff off one another, but make sure that the person you ask a question to has the final say. Now is a great time to nudge the social dynamics at the table, and a well timed "okay, these are all great ideas, but ultimately I asked Kate this question, and I want to hear Kate's answer" can go a long way towards ensuring that everyone has equal input.

Ask questions that give you a better sense of the physical enviroment, the broader socio-political context, and how race and class issues manifest themselves in the local culture. Ask questions that establish key landmarks that you plan to incorporate into scene framing down the road, like the gigantic statue of the benevolent lich king in the town square, or the rustic chalet-style lodge down at the end of Voleski Street. Feel free to add a few of your own ideas into the mix along the way.

Don't attempt to create an exhaustive and definite portrait of the setting. Leave lots of room to discover more during play, or to add details when doing so would offer a convenient opportunity. Get enough details so that everyone is excited and on a similar page, and then move on.