agreed! Think of the Austro- Hungarian Empire, pre-Victorian. Very complex and so little known in America as to be a slam dunk for any and all Fantasy ideas. There are no end to the principalities and noble houses plus a web of plots and counter plots to base your re-creation on. Not to mention Alchemy, Necromancers a la Doctor Dee. The Carpathians belonged to Hungary for quite a while, until WW1 I think. Which happens, btw, to be one of my favorite settings. For God's sake, Transylvania and Gyula 1 . If you can't make a Fantasy tale out of all of that, you're not really trying. (joke)Well, that setting has been done quite a bit, so you can be confident about reception. Most, however, have been resolutely English. Choosing somewhere in eastern or even central Europe would at once make it seem exotic to most American and English readers.
How low the fantasy? Some simple magics of limited effect. You could also posit magic on the retreat in the face of urbanization and technological advances (another frequent theme). That would let you sprinkle in as much as you like while also arbitrarily limiting it. I think Gaslamp has a restricted time period, since it comes prior to electrification but after (or alongside of) steam. The 19thc saw such radical change in every aspect, you'll want to pay some attention to the era you choose. Here again, shifting the geography can give you some flexibility.