I've read several discussions about how Blackmoor was often built in part by the players, things like the staircase built by King Funk that led directly to the orcs level in the Blackmoor dungeon, but I'm curious: what was involved in the players doing this? Was it just allowed because it was cool and added depth to the setting, or were there actions/rules that the players took to see to their construction?

I am not sure what was involved with building the Orcian Way, but I produced floor plans, hired men and paid for the construction of Zvenzen's Freehold. I can't tell you what rules were used. I was not privy to that, only the bill that was presented and some related mundane tasks.