World building is the process of creating a world through modelling of the climate, elevation, precipitation and other factors over a whole world in order to generate a geography and/or history procedurally. World building is distinct from dynamic world generation because the whole world is held in memory and successive processes are applied to it. For example, a height map may be generated, then fractal river basins may be calculated, followed by a precipitation map, then erosion and so on.
Note that world building is typically done using a mix of teleological and ontogenetic techniques. For instance, the height map may be generated using various fractal techniques instead of attempting to model continental drift, but erosion may be determined by using a simplified model of rainfall.
The best known example of world building is Dwarf Fortress.
The external links give a number of code examples. In particular, the Polygon Map Generation code is MIT licensed ActionScript 3. There's a Java+Processing port, a Perl+SVG port, a C#+.NET port, and a partial iOS port.
PCG Wiki References
Making Worlds - series of articles on world construction.
Procedural Planets - blog post and example code using Cubic sphere projection.
Dungeon League - Development blog of Dungeon League.
Polygon Map Generation - Article which walks through the process of generating an island.
A Survey of Procedural Methods for Terrain Modelling (PDF) - 2009 Paper summarizing various approaches people have taken to generating terrain height, water features, vegetation, roads, and urban development.