3-Dimensional game worlds share the same characteristics as "the real world" we all inhabit. Simply put, objects in this world have length, width and height. Of course, since most games present visual information on a 2-dimensional surface (like a TV screen), this does not mean that the viewer actually sees something in 3-dimensions but that he is led to believe that what he is seeing has three dimensions. This is principally a matter of presentation in those cases where the player may be limited to performing actions in only 2-dimensions. See also Cardinality of Gameplay.
Early examples of games that have 3-dimensional game worlds include Battlezone, Wizardry and Star Wars.
World of Craft
A strong example of a 3-Dimensional game is World of Warcraft. World of Warcraft takes place in a 3-rendered environment modeled using 3-d graphics.