I started off thinking of the combat system, in general terms. Then I started thinking around that. I'll just kick off with the combat system- for the record, originally I was imagining a turn-based RPG, then a 3D physics heavy shooter-RPG. I hope it's narratively rich enough that it doesn't really need to be attached to a game, but that's where I started thinking. Lastly, I'll be building on this post, and I have a lot more thoughts than I've yet written.
Combat
Most importantly, relative to modern day, an effective gunpowder was never invented, nor were microchips. The most effective weapons are rocket-based- guns fire rocket bullets (which do exist today, their only advantage being that they can be fired underwater in space.) In effect, these do more damage at an "optimal" range, the point at which they stop accelerating. Bullets are not effective up close. Furthermore, the rocket fuel used in this setting is, though abundant, not very effective in small amounts- a bullet has a small failure chance, and at best takes several shots to kill a healthy soldier. Often shots don't pierce the skin. Crossbows are common, and indeed more popular in some areas. They don't have the range and accuracy of guns however.
Larger rockets are not accurate as artillery unless they are heat-seeking, which is not effective against infantry. However, rocket-powered lances are sometimes used in combat- these are thrown by hand and the rocket booster is ignited when a wrist cord, approximately 18 inches, snaps. They have no warhead (remember, not effective high explosives) and at best spray rocket fuel over their target. Many have merely a sharpened head. Rocket boosters can be bought on the cheap in specialty stores and even supermarkets by civilians. They are used for all sorts of daily activity, or in combat, to hit people with heavy things. Single-use rockets can easily be attached to any manner of object, propelling crates at people or changing the environment to your advantage (EG raising drawbridges, closing heavy doors, etc). Rocket fuel comes in solid (burn once) and liquid (burn from a tank, after being injected through a valve) forms.
Swords are by far the most reliable and damaging weapons, although modern materials mixed with medieval style armor designs still make it difficult to kill a soldier with just one hit. They also tend to be of a better quality, since rocket weapons break or dud often (don't worry about them failing on you in combat, just in fluff terms) and swords don't have to replaced frequently. Machine produced swords are the standard fare, but anyone willing to spend a good bit of money can get a nicer hand made sword. Buyers beware of crappy stainless steel "fake" swords. A swordsman will usually defeat a gunman if the gunman is somewhere the swordsman can easily run to, and not too far away.
Magic is mostly concerned with manipulation of natural forces. It's effective mostly in slowing down or confusing attackers, making it effective against swordsmen. In general, a magic user will support a sword or more often gun wielder. They are vulnerable to gunmen. Magic offers some healing, but mostly mobility- the vast majority of magic manipulates gravity or performs terraforming tasks. A very skilled magic user can throw someone to the air and back down dealing damage, but must will just lighten or heavy a person. They can also create cover or hills from dirt, rock, and concrete (and conveniently collapse buildings). They also can manipulate simple controls, such as starting rockets which have pull strings. Magic users usually rely on rockets heavily. Few people strictly use only magic in combat.
Vehicles I'm unsure about. I'm thinking interstellar and sea travel by rockets ought to be more common, but due to the nature of the ever-ubiquitous rocket fuel combat vehicles aren't too common. Cars in general aren't practical due to lacking a reverse gear- most vehicles either A) can be pushed or even carried around by a single man or B) are larger than your stereotypical one-manned space fighter. Horses are a possibility, but I'm not sure where they'd fit in the physics-based combat balance. I'm not sure how I'd excuse not having, say, bicycles, which fill a similar role.
More on Tech Level
Rocket ships I'm thinking are a yes, along with electricity- the gas lamp is a thing everyone has because they don't want to throw it away yet, just in case. There will be a merge of 50's/60's sci-fi with outright renaissance elements, due to the lack of cars and remaining prevalence of melee combat as well as ineffective artillery. Castles exist, made from a mix of stone and steel (I wish I could draw what I was thinking of) and are probably accompanied by pillboxes. At any rate, megaprojects are common due to a huge prevalence of cheap materials, including the rockets we know and love.
Specific rules/nature of Magic
The World
Lower gravity than earth, and more exotic life-forms. Space travel between a small handful of planets, which are assumed if not stated to be much closer to each-other than any real planets we know (perhaps this affects gravity- there might even be a gravitational tidal cycle). There might, just might, be air in "space"- I'm not sure on this point. Most importantly, these planets are not single-biome planets like in many sci-fi worlds. Each is quite as diverse as earth.
Culture and Politics
I should whittle it down to a few specific planets later (I'm imagine few enough that anyone familiar with the setting could remember them all), but I'll with general rules right now. There will be some exceptions. Furthermore, due to the ease of travel there's a decent amount of 'globalization' (I refuse to call it 'cosmolization' seriously) in the cultures of the planets. Some may be harder to access than others. At any rate, most governments take up whole continents, and some planets. By far the most popular system involves a counsel at the very top (lots of intrigue going on between them), who have Viceroys below them and Chancellors below them and then Governors. Usually a governing body consists of a few, or sometimes even just one, extended clan(s), and it's very hard for someone who isn't a blood relative to gain a position of power. No, this is not a very good way to run a government- players will probably find themselves doing some dirty work for a clan feud or to get someone into (or out of) power.
Language, between the planets, I'm not sure about. It would add a lot of character to the setting, potentially, but it would have to be assumed that either A) there is a common language or B) the player character is a polyglot, most of the time.
Anyway, the remaining social cast is pretty broad. Most of the grunts are factory workers (assembly lines are a little primitive) or farmers. If you're wealthier, you're a merchant, artisan, or... yeah. There's not much in the way of corporate employment. This is also an age where there would be a divide between 'city folk' and 'country folk'.
Economy
General Lifestyle
Aesthetic Theme
Metal is cheap and easy to work with. Plastics are largely unheard of- I'm not sure whether they should exist at all. Due to the lack of guns, cars (see vehicles in combat), and microchips, technology most cuts off at what people thought was cool science fiction in the 60's. The style of industrial equipment made of large buttons, framed in 1/8th inch steel plates that was popular from the 1940's to 1960's is pervasive in everything. Some renaissance and industrial revolution elements remain- I'm not going for a "steampunk" setting though.
Hrm, that's all I have time to pound out right now. I've got a lot to add to what I wrote, as well as all the cultural/political stuff. Aside from general commentary, I'd like to hear ideas on A) a good name, B) the origin of magic, and C) the source of virtually limitless rocket fuel.