I don't have much of a backstory in my main town. My mayor is sort of a stylized and idealized version of myself. I do have an alt in my town who is a shy, quiet farmer that loves crickets and reading. The town itself does have a bit of a history to it. I designed one half of the town in the zen style and I consider that the 'old' part of town. When the mayor (myself) moved to Sakura, she lovingly restored the old zen landmarks and also constructed a nice residential area across the river where all of the villagers live.
In my second town, Nocturne, I am going with a full-blown theme and backstory. The mayor, Amethyst, moved to a new town where she found love, got married, and had a child. Everything was going well until a tragic accident occurred and she lost her spouse and child. She became mournful and secluded. She started neglecting her duties as mayor, so her younger sister, Azure, moved to town and got things back on their feet. Azure created a public gallery for music, artwork, and socializing to keep the town up and running. Azure continues to try to coax Amethyst back into town and away from her misery, but so far it hasn't worked.
Nocturne is still a major work in progress, but as I'm playing the game, I'm thinking like the character. So far, I've only created Amethyst and she in the process of building her life. She's still social and happy. I won't create her sister Azure until the story calls for it, so to speak.