GM planning approach gleaned from my military days. While I do use this approach often, I tend to blend it in with some other planning methodologies learned over the years.
Like a lot of young GMs, my early forays into GMing were fraught with an extravagance of planning to the point of absurdity. After a while I wasn't prepping for a game, I was essentially playing a different game....with myself.
Now let's be honest here....how many of us have sat down and basically created an entire game world? Created countries and NPCs on the far side of the world that will never come into play? Made up over-the-top high/higher level adventures that the current campaign group might be able to see some day.
I get it...been there, done that. Sometimes the exercise of creating is just simply fun. No harm in having fun, is there? In my opinion this is only a problem when you are trying to plan for a specific game (campaign/session) or when you really need to use your resources (time) wisely. Since I rarely hear GMs say, "You know, I seem to have way too much time to prep for my game!" I'll have to assume this simple, targeted approach will work for all GMs.
The idea is to keep your focus small, centered around the PCs. In the beginning of a new campaign, fresh low-level PCs don't really have too much need to venture outside of their home turf. They are relatively weak and have difficulty keeping their fleshy bits intact out in the unfamiliar world. There is a reason most starting (0/1st level) adventures begin in the PC's home town.
After a level or two the PCs may feel their bravado rising and seek bigger challenges than what their sleepy little 'burb can offer. Maybe they have some decent gear and don't feel so exposed to the dangers of the world. The natural inclination is to begin exploring the area around their home base. They can still retreat as needed and as they gain more confidence in their abilities, or just decimate the local adventuring opportunities they can push out a bit more.
I like to think of the PC's abilities as being a "sphere of influence". On a map this sphere is represented by 2D cross-section of said sphere, which is a circle. As the PC's grow, their sphere of influence, and consequently the map-cross sectioned circle, gets bigger. The PCs will venture further and further from their starting location and eventually will be able to influence things on a regional or even continental scale.
Obviously this will take time, and some groups may not make it to the "earth-shattering" level. Because of this it is easier for a GM to work small, detailing the PC's home location, and "push out" the planning on an increasingly larger scale as the PC's expand their influence. No use mapping out the area and NPC relations for a country on the other side of the world for a 1st level group of adventurers.
At the same time though, I get that you might need a bit of information for that country in order to seed the campaign well before the group's influence reaches that far or because the player may want to know some of the bigger picture. You can design on the fly, make a skeleton framework, or do extra planning "for fun" when you have that plethora of time.
Kenzer & Compay's Aldrazar and picked up both the Garweeze Wurld Atlas and the Garweeze Wurld Gazetteer. The cool thing is that they've essentially bundled them together into one product and made it available for the original price of one! The new product is called World of Aldrazar, and I think it is worth the $15.
Each country has a one-page write up and there is a huge map broken out into sections that, to me, gives me just the right amount of "wiggle room". I can make my own area maps and just use the highlights I want. If I want to switch out a country, no problem, but the skeleton framework is there until I need/want to make a change.
Of course this is just an example of what I do. Even if I wasn't using this game world I'd start small and work my way outwards as needed. That is what the targeted approach is all about.