This is already pretty fundamental to the game - the world is a scorched wreck at the start of the game, and you will be changing the landscape in somewhat the way you are talking. The way that you will change the landscape will be based on whether you follow life or death magic, I do not think at this point the other schools play into that aspect.

Later in the game their will also be major "world altering spells" which we are told will be similar to what you could do in Populous. So at that point maybe the elemental schools you follow will have more impact.

yeah, I believe its been directly stated somewhere that players will be able to influence the world in the ways you speak.  

I'm interested in seeing if players will be able to influence the theme.   Things like, influencing the goal of quests as to lean in the direction players want the game to go.  I guess the idea being that more than on setting scheme being balanced.    I don't know, its early and I'm kinda rambling.    But its still a more back-end thing, since I've no worries that frunt end stuff (like terrain) will be influenced on the fly, or through mods, to be whatever anybody wants.

Does that mean it'll be more of a B&W2 system? Where if you're good or evil will make the land either all lava-like or more green?  Though I also think I remember hearing something about fertile land spreading out from your cities, so maybe that's a moot point.

I agree though that some major land altering spells would be pretty awesome.