Terrain Components

On basic principle, different techniques are used to draw the different constituents of the terrain. They all fade out to a diffuse texture that generally bakes them into the distance.

Draw distance for key components

A Few Notes

Rocks Refers to small bush sized objects, not rock embedded into the terrain.
Trees vs Bushes These are both rendered using the same system but smaller things like bushes fade earlier and only have one mesh.
Shadow and Reflection Maps Are render targets for special effects.
Client NPC Refers to decorative NPC's such as birds that the server doesn't process.
NPC Billboards Are generic shapes and not renderings of the specific NPC or its pose.
Sky Dome Is rendered before applying the z buffer.