Well, you can start with the architecture. In urban planning for fantasy stories, the buildings can be very different from our real - world ones. They could be floating, or made of crystals that glow at night. Also, think about the transportation system. Maybe there are flying carpets as a common means of transportation in the city. And the social structure also affects urban planning. If there are different races in the story, like elves, dwarves and humans, each race might have their own area in the city based on their needs and cultures.
One way is to create a unique city layout. For example, in a fantasy story, the city could be built around a giant magical tree. The roots of the tree form the streets and the branches are like bridges connecting different parts of the city. Another way is to consider the function of different areas. There could be a district where all the magic shops are located, and another area for the mages' guild. This helps to create a vivid and believable fantasy world within the story.