I'm prone to agree with Naatkinson. If you don't want to do a patently fantasy setting, kalajel, I'm okay with creating something a bit more nebulous. Like an urban fantasy or gaslamp setting with some occult elements. I'm also not "married" to the idea of a Middle Ages Europe aesthetic.
Here's a thought! What if we treat the medieval era like current writers treat science fiction. One country or landmass in our setting has an indigenous population of humans that have not successfully migrated outside its borders. Every other country/landmass (whichever we end up using) has their own genesis separate from how humans happened (evolution, created by a deity, whatever). Let's say hypothetically, that the humans evolved from apes, but the elves (not that we need elves specifically) were created artificially by ancient visitors from another world, and the dwarves (same case) crawled out of pools of primordial soup. That way, each unique group has been separate since the beginning, and the only reason for them to ever get along would be in the name of a united tomorrow; world peace, that whole deal.
Instead of being separated by mountains, rivers, and seas, let's take this to an illogical extreme. That's not water in between them, but toxic sludge, or an empty void, or something like that. Those aren't just mountains, they're titanic fortresses created by ancient beings (or the dominant political power), to restrain all the others under their authority. Essentially what I'm suggesting is a hyperbole, taking the emotional distance of that time and turning it into a more literal interpretation. Great expanses that cannot be traveled by boat would provide a great justification for something like airships. Or at least airplanes and helicopters. Unless we take it a step farther and have those conditions be unflyable/difficult to fly, and the only way to cross is by special clearance. Some kind of Stargate network or teleporters. If we do magic, there could be illegal spells that let you cross the distance without using one of the existing gates.
Anyway, those are just some ideas. Please generate some of your own, and we'll dish.