Anyhoo, here's are some simple questions you can ask yourself when building a setting for RPG shenanigans:
Who is the best wizard in town?
Who is the best wizard around?
Come up with a name, maybe a level and an alignment, and an additional fact or two. Here's an example. The campaign is set in the County of Winshire, with action often taking place in the small town of Midwich.
Didymus Ashlar, greatest spelljockey residing in Midwich, MU6, Lawful, improbably huge handlebar mustache, owns a wand that shoots rust monster lasersThere's a bazillion variations you can work off of here. Instead of "best" substitute "worst" or "most infamous". Instead of wizard go with "knight" or "priest" or "magic sword" or "sleazy tavern". For background material ask yourself "Who was the greatest wizard/thief/king/belly dancer of the past millenium?" Etc., etc. Ad infinitun ad astra. YMMV. 90210.
Drayton the Reprobate, most potent wizard native to the County of Winshire, MU11, Neutral, knows the name of every dryad and river-nymph from here to the sea for exactly the reason you are thinking, owns half interest in a vineyard somewhere in Goatswood Valley
Once you've got at least a dozen or twenty of these sorts of things written up you can then create a die chart labeled "Interesting People, Places & Things" that you can roll on whenever you need some inspiration for a scenario.
Another thing you can do is break out your random reaction chart and make a couple rolls to see how Didymus and Drayton get along or how interested Drayton is in finding the greatest grimoire in the land. A few pregenerated relationships like that will make life interesting for the PCs as they slowly work their way through your list. "Help you? Everybody knows you're allies of that upstart prestidigitator Ashlar! That son of a sea-hag owes me 500 gold pieces I loaned him ten years ago!"