I’ll say right off the bat, I’m a bit of a history nut. I did a history minor as an undergrad and specialized in medieval and early modern literature in grad school. History is fun and important.
Fictional world history is important too, both for fleshing out the world and setting precedent or the origins of current action. But, in worldbuilding the questions arise: How much history should I provide? and How much detail should there be?
To help with these, I think we need to look at a trio of questions:
1) Will a simple timeline work or is more detail required?
2) How geographically broad should our history be?
3) How far back should the history go?
For a short story or novella, a brief outline or timeline, even a sense of a few major events may be enough. For other genres, more detail may be necessary. Still, we need to decide whether our history should cover a small location, a city, a province, a nation, an entire world, or an entire universe or multiverse. On one hand, I suppose we have to say the whole world at a minimum because no nation, city, or place exists in a vacuum. They’re all influenced by neighbors. On another hand, look at how many books are currently in print covering the entirety of Earth’s history . . . lifetimes are spent chronicling a couple aspects of one nation’s history in a specific time period (sometimes twenty years, sometimes five hundred). Which brings us to how far back should we go. Do we need “simply” history (from the dawn of writing) or should we include legendary or mythological history, maybe pre-history would help too. And the snowball rolls down the hill faster and faster, growing larger and larger.
The level of detail and scope depend on the writer’s purpose and desire. A brief history with room to flesh it out is useful for short stories and novellas, maybe even for stand alone novels that are a lone foray into the setting. More depth and detail are, perhaps, more useful for a planned series, especially if it takes place over an extended period of time.
For examples: J.K. Rowling and Steven Brust seem to take a brief timeline and fill in details as needed, sometimes popping in seemingly random events (Rowling’s Werewolf Code of Conduct of 1637). At the other end of the spectrum, there’s Frank Herbert’s epic history of the universe before Dune (largely unpublished, or later published as novelized highlights) and Tolkien’s long history in Silmarillion (a dry read; published, but never intended for publication, meant as a personal reference work). George R.R. Martin’s history of Westeros seems to fall somewhere in between, leaning toward Herbert & Tolkien.