[Wiglaf]

Personally, I think that just enough history to make characters actions understandable is the best starting point. If you have the skill, you can make allusions to a few other "historical" events to convey a sense of depth. For example, "Eventhough the sword was dull and rusty, brandishing it made him feel like Gwarond, slayer of the seven dragons." Gwar has nothing to do with the story. All we know is that he apparently killed seven dragons but, he provides a sense that there is a whole world beneath the story as well as providing an example of a hero the protagonist can identify with.