Aleph Null:
Take a D&D or Pathfinder living world concept but remove the cumbersome restrictions of character creation. If you can dream it, you can be it. The catch: rule of logic; if you can't justify your character doing a particular thing, then your character's not doing that thing.
The problem with this is that when it comes to a fantastical fictional setting the "rule of logic" has a lot less to do with "logic" than it does with "preference."
That's why the "rule of cool" seems like a more common and generally more workable approach.
Aleph Null:
For example, you can have your dragon PC, but you're not very likely to be adventuring with a group of level 1 newbies, because why would a mighty dragon stoop to that level? On the other hand, said dragon might very well team up with very powerful forces of good (metallic dragon) or evil (chromatic dragon) in order to accomplish epic feats.
Okay, but:
ShadoPrism:
Actually a level 1 Group of dragon PCs would work (Council of Wyrms setting - a 2cd edition varient covers that kind of thing).
Though it could be a very Young dragon to. Just out of the nest and looking for treasure or a good time or what have you.
Could see an adventuresome fay type riding said dragon as they look for adventure to. All kinds of possiblilities and fun romps with such things in play.
As ShadoPrism demonstrates, it's quite easy to justify what might seem like a very "illogical" idea to someone else.
What you're proposing can still work, but everyone would have to be honest and upfront about their preferences ("No really powerful characters, please," seems like a reasonable request, though still less straightforward than you might think) and everyone would have to make a reasonable effort to find ways someone's idea
could work instead of reason why it
can't work. A "Yes, and..." approach would be advisable.
Good luck!