Some edges aren’t drawn correctly here, owing to non-flat quads. :(
The terrain itself is just some basic Perlin noise. When most folks do terrain generation, they start with complicated models of the way that geography work, pushing up mountains and filling in ponds, and then simulating erosion over hundreds or thousands of years. The benefit of thinking about man-made geography like that found in MMORPGs is that you don’t have to do any of that hard work; just fit the world around the desired game, and that’s generally “good enough” for the plebs.
Of course, no MMORPG would have terrain nearly as jagged as that shown in this screenshot. I just ramped it way up, to test out that everything was z-buffering correctly through the glowy vector pixel shader.