Thinking about it practically, embracing the fantastical in a world is a thought exercise. There are a couple questions to think about, and the answers you come up with are ways that the world is likely being effected by that thing. One thing to consider is to ask the questions of the whole group if you have some common themes, or the internet if you go to a forum, because people will apply their answers in different ways - just like the people in your world would.
Question 1: How do people use
How do the every day people use the thing you're talking about in their everyday life. For D&D and many worlds this can be magic. In L5R shugenja speak to the spirits and are sought out as priests and holy men. They confer with the spirits to find out why things are going wrong, how to keep things going well, and to do 'mundane' things like ensure a good harvest, or good weather for important days.
In older editions of Dungeons & Dragons magic is so common that it is a way of life for people. There are entire industries based around making, selling, and trading of magical items. Almost every city worth the name has at least one place that trades in magical goods, or can provide a line on magical secrets. Magic, in many of these worlds, is a luxury for the wealthy but the very nature of sorcerers and bloodline magic does mean you have it showing up with those of more humble birth.
Question 2: How does the military use
Walls are an interesting defensive mechanism. They're designed to keep enemies out and to provide a high vantage point for defends to shoot down on the enemy. They don't do super well against flying enemies. In fact, you put an airborne enemy over and the walls you built to keep people out are going to trap people inside.
This doesn't mean walls aren't useful in a high fantasy world with flying creatures like dragons, but it does mean that those cities are likely going to have - or should have at the very least - some form of defense against airborne threats. Traditionally in fiction this is towers with ballistae capable of aiming up. It can also be powerful wizards who can shield the city, or otherwise threaten/chase off the airborne threat. Different places will have different answers based on the resources, but it is an important one to answer.
Magic is no different. One of my favorite examples of dealing with magic is actually from Runeterra - the fictional world for League of Legends. In Runeterra the city-state of Demacia abhors magic and mages, but they live in a world full of magic. So how do they deal with it? Demacia has access to a resource known as 'petricite' and petricite has the magical property of absorbing magic. So when Demacia fights, their soldiers have petricite armor, shields, and weapons. This gear protects them against magic, and is highly effective at breaking through magical defenses. In other words, the presence of petricite equalizes and nullifies the advantage an enemy would have against Demacia from using magic when Demacia doesn't have it.
Question 3: What can be built or done with the
This is similar to the above two questions, but is specifically focused on crafting and building things. What things can be build with the magical resources? What is done with them? People hunt deer for trophies, but there are also things done with the bodies from eating to making clothes to making tools and weapons. Can this be done with the magical or other 'not from the real world' things in your world? Is there a market for basilisk venom? Do people hunt dragons to make things from their scales/bones/claws/teeth? Can they be used for magical rituals?
In the event those creatures are intelligent, how do they feel about that? Do they resent it? Understand? Not care? Do Dragons think it serves the 'weak' dragons that get themselves killed by the small bipedal creatures to be turned into armor, weapons, spell components, and trophies or does the presence of such things enrage them and drive others to attack if only to teach a lesson that using a dragon as a trophy will lead to the ruination of the entire countryside?