I love giving my players the freedom to do whatever they want with their character’s history and experiences. Some things are off limits, of course, such as making your character the current Mayor of Quivarra, but as long as your choices don’t fundamentally alter the world of Xotamen. You can have a much more epic backstory if you’re creating a higher level character, of course, but try not to do it for a Novice hero.
Feel free to modify the existing Backgrounds from the Player’s Handbook to best match your character. I will always prefer a personalized character to a cookie cutter one, as long as they’re within the background guidelines.
I will be adding elements from your backstory into the campaign world! Examples of this include the towns of Place’, Ryshbell, and Rekfield, which did not exist until one of my players wrote it into their character’s history. Invent a town that your character is from and give me some good details to work with, and I’ll give it a permanent location on the world map. This extends to organizations as well; if your character worked against some shadowy pick-pocketing club while living in Quivarra, I may sprinkle some of its members into future encounters.