I'm currently making a casual MMO (non rpg) game based around this very idea. In my game players can buy plots of land (it's a 2D tile game so each plot is a tile). Once they purchase land (which has rules around it to avoid people boxing others in, and other issues that could happen) they can then gather resources on their land, building housing, or other buildings.
There are zero NPC's in my game. The entire economy is player driven.
Players can build things like lumbermill (for processing wood to lumber), marketplace (for other players to buy/sell goods), bakery (to turn flour, eggs, etc into food), etc. The player owner of these buildings doesn't need to be online for others to use the building to make their goods. The owners set a fee for using their buildings, in the case of the marketplace it can be a % or a flat fee.
The players have needs that they must meet for their character to perform at optimal levels (you can't ever die in my game though). These needs is what drives people to basically make a civilization. I randomize the map once with all the resources the game has to offer and the first set of players will just appear on the map with some money, some gather tools, and the clothes on their back. I want them to create a civilization with the world I present them! Every server will look drastically different.
To start with I'll introduce some basic things, but over time the patches will add more and more things to the game. Resources that nobody cared about to start with will suddenly become important to craft new things that get "invented".
I have the streaming map to the clients with multiple clients able to connect finished (I'm very proud of the streaming map :)). Next I'm working on buying land, and then on gathering resources starting with wood & seeds from trees (you can plant trees with the seeds to grow more trees). Then the sky is the limit!
