Gender and sexuality diversity in RPG settings

[BRC]

So, the question is what are you trying to do
(priviledge check, cis white man here)
Are you trying to create a setting free of prejudice gender and sexuality? (No sexism, no homophobia, ect), or are you trying to explore cultural ideas of gender and sexuality within a fantastical setting.

Assuming the former, and assuming you're mostly interested in making a welcoming setting rather than doing an academic deep-dive into "Well, what aspects of society were influenced by sexism and homophobia, because those would need to be different", it's pretty easy, your biggest danger is going to be accidentally using harmful tropes, even if such tropes are not really a thing in-universe.

( I recall some official D&D Module, where they made an effort to include several characters in same-sex relationships. However, because of the nature of the campaign, most allied NPCs you only interacted with in a professional context, so the 'Representation' was basically "You are storming the hideout of the EVIL CULT LEADER! BTW, She has girlfriend!", this happened a few times with the evil NPCs, such that the 'representation' was limited to villains). Make sure that when you're adding diversity into your setting, your not falling into easy traps or stereotyping without meaning to.

Re: Trans people. Mentioning the ease by which people can transition in the setting fluff is probably enough. If you want some explicit Trans Representation, you can have photographs or documents from when somebody was a child, or have somebody mention changing their name. In the interests of establishing how this works in the setting, you could have the in-universe equivalent of when a modern celebrity comes out as Trans. "The woman formerly known as the Duke of Place would like to announce that she has selected for herself the name Francine Venhouser, Duchess of Place. Please update your address books and invitations accordingly".

Other options for "Times when it's relevant a character is trans" (Once again, Cis White Man here, so, like, don't take these as guaranteed)

1) A character who recently transitioned (Medically or otherwise) is selling their old wardrobe and buying a new one.
2) Paperwork or other bureaucracy that must still be dealt with, even in a world without transphobia.


also, what's your intended audience here? If this is a setting for a personal game, I'd talk to your group about how they want things handled. If you're hoping to publish, I know there are sensitivity editors out there who can probably help better than a bunch of random people on a forum.