The phrase "intellectual property" can be very misleading. IP covers at least 4 very distinct areas of law which have wildly different rules: Trade secret, patent, trademark, and copyright.
Patents protect "inventions." You can't patent a name or a character. (You may be able to patent a graphic design. This is on my long list of crap that depresses me.) Completely irrelevant to this discussion.
Trade secret protects things you're told or shown after you've signed a non-disclosure agreement. Completely irrelevant to this discussion.
Trademark protects individual words, phrases, and identifying imagery. It potentially lasts forever, so long as you keep selling products marked with it. You can't generally trademark single common words, and trademarks are limited to specific areas ("toys", "clothing"), although things get wonky when you get widely known ("infamous marks"). A key element is that you need to ship something labelled with your trademark. Transformers is a trademark for the line as a whole, and there are certainly Transformers products. Optimus Prime is a trademark for an individual character who, notably, is available for sale. If there was some incidental background character who is named, but no toy or other product was branded with them, they couldn't claim a trademark. That's not to say that Hasbro might not try, but it would be easy to challenge. I happen to know the current My Little Pony, and tellingly, the major characters who have individual products are indicated as being trademarked, but a lot of minor characters are not, even when they're included in sets of toys. And it's important to note that you can potentially trademark a character's name, or even a particular image of them used for branding, you cannot trademark the entire character. End result: some of the original Mystara terms are probably trademarked. Most are probably not because there was no matching product. Hard to guess for the place names, as a lot of place names were product names for the gazetteer line. Searching the USPTO database, Ostland is not trademarked. For those names that are trademarked, it's not that you can't use them anywhere, it's that you can't use them in a way that might lead to confusion in the marketplace. (Fun fact: if someone tells you that you need to put a trademark symbol after a trademarked word or phrase just because you mentioned it, laugh in their face. You don't.)
Copyright covers particular works. Notably, individual words or even short sentences cannot be copyrighted, although the larger work containing them might be. Wizards of the Coast cannot make a copyright infringement claim because I happened to use the name "Ostland."
Now, if you build on top of someone else's setting, you enter a grey area of copyright. Where was "inspired by" end and "derivative work" begin. It's a messy area, but clearly you can directly build on someone else's work sometimes: The Harry Potter Lexicon and The Wind Done Gone leap to mind immediately. Ethically, walling off culture from reinterpretation is a terrible idea, but legally you can stop some aspects of it.
Having now read some of one of Alley's books, as best I can tell it is an original setting and story; she just used some of the names*. There can be no copyright claims. Unless the individual names were used to identify products, were trademarked, and those trademarks didn't expired, there can be no trademark claims.
* And the map. This is almost certainly copyright infringement. Fun fact: maps were one of the first things covered by copyright in the United States.
Oh and "basing a career on it" isn't actually legally meaningful. It may be the point at which a company decides to come down on you. That you might be engaging in commercial use is only one part of a four part test in the United States where all four parts must be considered as a whole.
