the freedom of fiction

Now that I've started talking about this new series, I can't seem to stop. Today I'm debating something that's been going around in my mind for weeks: Should I set my story in some kind of real historical or geographical basis or should I cut all ties with reality and set the story in my own world? I'm not talking about the difference between fiction and non-fiction; one of my characters can summon a wind at will, so obviously I can't be writing non-fiction! But should I do a Temeraire and set my fantasy in a historical reality?

Arguments for using reality:
Some things in my story, for example certain places, are directly based on locations that really exist. James Firth comes from Ireland; Duarte comes from Spain; the enemy is French, etc. If I say that James is Irish, then it's easier to explain that the 'English' mistrust him. And it won't confuse the reader so much if I use the real names of the countries; if I create names for these places, then the reader has to get their head around entirely made-up nationalities, cultures and histories. Even if those countries bear a resemblance to a country the reader's familiar with, rewembering all the names, politics and allegiances can still be tiresome.
And the whole storyline is set in the general context of the Napoleonic War, including the neutral ally (Spain) that becomes an enemy, the brief peace and return to war, etc. I could simply lay out at the beginning that the story takes place in that era, and save myself lots of contextualising.

Arguments against using reality:
Reality comes with constraints. I don't have to obey them, but knowing me, I would feel obliged to do so. I would have to research the war and fit my story into its timeline, research geography and stick with its distances, research historical attitudes and incorporate them. But if I ignore reality and set the story in my own world, then the war can last as long as I please, Spain and India can be neighbours, and it can be acceptable for a merchant's daughter to sail in a ship full of men.
And of course, it's not as though the ability to call a wind at will is realistic. I am writing fantasy, after all. It's not that reality has no place in fantasy or that fantasy has no place in reality, but ultimately, can't fantasy be my excuse for using my imaginary world? The world that I've transposed from the real one?

The winner:
It looks as though my future readers will have to get their heads around entirely made-up nationalities, cultures and histories. I'm leaving reality behind, baby!