There is no PvP. Anyone can kill anyone at nearly anytime.
Um. Doesn't that mean there is global PvP? If there was no PvP no one would be able to kill other players; if anyone can kill anyone then PvP is anywhere and everywhere.
My video game, hunh? Hm...
I'll probably have to edit this post a few times to flesh it out gradually, so some notes for reference if I have to come back to it later: Mount & Blade (factions, mapping, travel), Dynasty Warriors (combat framework), Actraiser (population management, quest format), Minecraft (expansive randomly-generating worlds). Note that I'm not meaning to just cannibalize and compile the actual games, just some general ideas to work with.
So, to the game idea.Venture Capital
(I dunno, first thing that came to mind)
Open-world adventuring game with a general pre-electricity setting - not specifically medieval or "traditional" fantasy. Theme is malleable, adapting according to player actions and creative decisions - customizable. RPG elements of character customization both aesthetically and statistically, stats determining mainly health, damage, accuracy, movement speed, charisma (more on this later).
Combat is 3D-brawleresque with smooth movement and combination attacks a la Dynasty Warriors, though ideally with fewer weapon choices and each weapon having a wider variety of techniques overall rather than DW's mass of weapons that all have just one chain of attacks each. Maybe entire strings of weak/medium/strong attacks that can be interwoven to create different effects (crowd-clearing, stuns, launchers, high damage, etc.).
Worlds are as large as player dictates at start of scenario limited by disk space, basically Minecraft-like where the world just generates more terrain/features as you explore it until you reach the established boundaries. Factions can be customized at start of scenario or left to randomized placement, up to 5 to start with more created through splintering later on. (Note that this includes splinter factions from your own group should you ever gain power over a faction.) The fewer total factions in the game the more likely cultural tensions within a given faction lead to rebellious outbursts and splits.
Equipment customization has no effect on stats - there's no epic +20 sword of asskickery to grind for at the endgame. Instead, equipment choices mainly provide different arrays of options: a spear has longer reach than a sword, but it's less useful at extremely close range; a scythe has nearly a spear's range and is more effective against multiple opponents given its sweeping attacks, but it's heavier and swings slower; etc. Variations between members of the same group (ie: all swords, all spears, and so on) are mostly aesthetic, though better-quality weapons are more capable of piercing armor and tend to be lighter weight for faster movement. Note about the armor-piercing: this doesn't increase the damage of the weapons, it's more or less a straight check of weapon material against the target it's striking. A wooden spear is not going to penetrate platemail armor. You can still beat the shit out of someone in armor, but it's essentially a staff or club for all the damage it's doing. Conversely, a steel sword against leather armor can penetrate and do its damage. System extrapolates from there.
While I envision this as a single-player game (because I tend to play games alone, even MMO's), if it has a multiplayer mode this pretty much removes the end-game raiding grind as it currently exists as there's no special gear to grind for - there's no grind-to-grind-better mechanic in the game, at least not as the endgame. I'm sure it will have some kind of progressing element in it at some point to improve a character, but I'm fuzzy on how far that would go.
Morality system: there isn't one, not in the sense of "act like a douchebag for Renegade points" anyway. The morality system is just your sense of morality. You'll have options that aren't clearly defined as "pick one of these three," mainly in determining how to govern a faction or, earlier on, how to gain power if you want it. You could try to climb the societal ranks through economic gains, marriage, deception, rebellion, blackmail, independent leadership (starting your own group), loyal service, royal lineage (new character in the family line of old character), basically the same ways people get power in the real world. When following rumors or hearing about jobs (the game's equivalent of quests) you aren't code-bound to actually complete the quest. It's just information to use as you wish. For example, you heard merchants have been raided by bandits on the northern road for months? You could get all heroic and kill/arrest the bandits and return the stolen goods; you could do the same while pocketing some for yourself; you could simply kill off the bandits and take over their territory, or join the band yourself and take part in some raiding on the roads. Or you could lose.
Now, in most RPGs, losing tends to mean death. Death is still a possibility, of course; getting into a fight with a pack of wolves in the woods is a good way to get your throat torn out, for instance. But picking a fight with a pack of bandits and finding out much too late that you're in over your head? Well, particularly if your previously mentioned charisma score is on the high side, you could end up with a rather more colorful fate to endure a while. I can't detail it here - public section of the site - but I would envision some writing and art set aside just for such situations (bandits being only one of these: a coup might end in enslavement by the successful party, for instance, or at the end of a war, etc.) to provide adequate flavor and substance rather than a token "you are captured and enslaved for X months." Nothing overly drawn-out; no one wants to get stuck in cutscene hell just because they lost. It'd be something of a minigame itself, allowing for periodic escape attempts as the days go by with bits of character interaction opportunities here and there, chances to turn members of the capturing party to your side to turn things around, making it part of the game rather than just "the pervy section" adult elements of games usually seem to be. Obviously this feature should be able to be turned off and locked as well for those who aren't interested in that kind of thing and/or worry about their kids getting into messier trouble than they should.
Oh, and no, charisma isn't just to measure your Molestation Likelihood, that's just a consequence of it. The main role of charisma factors into your political and diplomatic dealings, both with other diplomats in speeches and in winning over your subjects in public appearances and the like. It's personality and aura as much as appearances, more so even: a physically unattractive person can still have a certain magnetism about them. This is a quality of tremendous importance for any character who intends to do more than adventure around - good luck trying to win over and control an entire kingdom for long if all you have going for you is fear and strength. You need political sway to be an effective leader. It just has the added consequence (or bonus, depending on how you want to play the game) of possible alternative outcomes to failure in some situations, as mentioned previously.
Hey, I'm trying to make my ideal game here. Sue me for having carnal interests. ;p
City construction is very pared-down, M&B/Actraiser style. If you have a sufficient following and/or sufficient population to settle a new area you can start out with a small village and direct its development in the broad strokes, determining what direction the infrastructure should grow and funding that construction as it goes. There would be a number of aesthetic themes to start with and more could be unlocked through various feats accomplished in the game or added as custom-made mods/addons. (Sidenote: while in my ideal the art style of the game would be along the lines of Vindictus and Lineage 2, I'm aware not everyone is a fan of that kind of art, so the game would have underlying "themes" that could be swapped in, maybe one with a more cel-shaded toony look, one that's more simplified altogether for better performance with less artistic emphasis, etc., the way Minecraft texture packs can swap entire world schemes.) Professions can be developed once the proper apparatus are constructed (forge for smithing, mill for carpentry, etc.), but if the player character doesn't own territory they can work on these skills in any town with the proper facilities for a fee.
Materials can be located in specific sites rather than found at random nodes scattered around the world: go to the woods to gather wood, go to a mine for minerals, blah blah. To shorten gathering times, rather than just clicking on a tree and waiting for a bar to fill for 5 seconds or whatever then collecting wood, gathering would involve little minigames that increase in difficulty as your proficiency increases. Why more difficult? Because your haul increases the better you do in these games. Rough example of how this would work: at skill level 0 you get a little rhythm game for chopping wood (it wouldn't really be a rhythm game as I hate those, but I'm drawing a blank on what makes a chopping-resemblance minigame at the moment that isn't one) and doing it perfectly nets you 10 wood and 10 skill points. Every 10 points you get a harder version of the game, so the next time you go to get wood it's tougher, but you play that one perfectly too; this time you get 20 wood and 10 skill points. The next time you only get half the beats right on the 3rd tier minigame: you get 25 wood and 5 skill points. Even if you failed the minigame you'd get a minimum of 20 wood (but no skill increase) since that's the max you would have gotten in the previous game. Eventually you'd be getting ten times the wood in one visit that you would've when you started out, maybe more depending on just how hard these games were. It makes gathering more of an activity but also shortens the time you spend just getting stuff you need to build the things you want. This seems, in theory at least, like a win-win mechanic to me.
I'm loathe to include romance options with NPCs. It seems...hollow. I know I included assault possibilities above, but that's a conflict thing, that's what opposition is for, that's why there are NPCs in games. Romance options with NPCs feel like manipulation to me, I dunno. There would, however, be options for family creation, at the least. Establishing bloodlines, family territory, all that jazz. The multiplayer mode would include more extensive interaction options with other PCs, both peaceful familial/romantic options and "alternative" relationships - after all, it could be one PC is with those bandits from before and another is with one of the merchant caravans they raid, and where might we end up then?
One of the problems I have with sandbox games is that there's no clear goal or ending. The goal part is hard to outright solve, but the ending at least can come into play with aging. Eventually you'll grow too old not to retire, though how fast time passes in the game can be adjusted from 1 month passing each real-time day to making the game run 1:1 with reality. Time goes on, you have to get your affairs in order and, one day, you'll die, at which point the game offers to let you survey all that you accomplished in your lifetime, as much or little as that was. Snapshots of key events, summarized biographical reading of your deeds, general standing in the world by the end, that sort of thing, as well as the stats layout for the folks who love to drool over their kill counts and the like.
Speaking of death, this game? There's no respawning. There's no save-scumming. It's in "hardcore" mode. You save when you quit, and saving without quitting doesn't let you back up to load - saves are just there to protect against Critical Game Failure, basically, so that your game isn't lost in a power outage or a crash or similar. If you screw up saving your kingdom and it's overthrown, my condolences, but that's the way of the world. Best of luck winning it back the hard way.
Might add more to this later, but that actually fleshed out better in one go than I expected it would.