Seriously, in alot of RPGs you can walk around the entire planet. Okay, maybe not the whole way because of whatever obsatacles, but usually at least half of the planet can be walked unhindered. Either these people live on ridiculously small planets, they're Sonic the Hedgehog style fast, or the overworld map just condenses weeks into seconds. I feel sorry for my RPG characters, at least until they get whatever world spanning vehicle they usually get.
I always figured they were walking around relatively small countries with varied climates due to varying heights and mountain ranges and stuff as opposed to a whole world.
Well, take FF1 for example. That game covers an entire globe. I'd go with the last option and say that time is elapsed.
Games like Chrono Trigger and FF DO take place on whole worlds, your time on the overworld is condensed, it actually takes days, weeks, or monbths to go to certain places. Pokemon has you traveling a country or region on foot, by sea, or with flying pokemon, but there is no overworld because it's small enough to not need one.
*holds hand out to readers*
This is not the fourth wall you're looking for.