The world of One Piece is clearly fictional and it doesn't resemble our world's Earth. This way the author gets a lot of freedom to create his own world.
The world of one Piece consists are three different kinds of environments in which the people live in. The Blue Sea, which is a huge ocean that covers the world. The next one is the sky ocean, which is an environment in the sky. Finally the third environment is the ocean floor.
The Blue Sea
The Blue Sea consists of one large continent, one long chain of islands, and four seas that make up two larger oceans. The continent is called the Red Line, the big chain of islands is called the Grand Line and the four seas are called North Blue, South Blue, East Blue and West Blue.
As explained above, North Blue, South Blue, East Blue and West Blue make up the four seas of the world. Within each Blue, sea travel works as it does in the real world. You can sail to any destination you want with a regular compass. However getting from one Blue to another is much more difficult. The reason is because not only the Red Line separates the two oceans, but also because the seas within one ocean are separated by a large sea route called the Grand Line as well as two Calm Belts.
Grand Line
It is the one sea where normal compasses fail. It is the destination of every pirate and the path that leads to unimaginable adventures. Most of the story is based in the Grand Line. The reason this sea is sought by every pirate, at least once in his life, is that the greatest treasure, "One Piece" left behind by the legendary pirate, Gol D. Roger, is said to be on the final island of Grand Line ("Raftel"). The Grand Line is divided into two halves by the red line. The first half, known as "Paradise" to the residents of the second half of the Grand Line, is where most of the action has taken place, and where Luffy has found half his crewmates so far. The next half, which is said to be much more difficult and dangerous than the first half, is the "New World". The Yonkou unofficially rule the New World.
Calm Belt
Red Line
Sky Ocean
The Sky Ocean is a place that is unknown to most people in the Blue Sea. The reason for that is that the Sky Ocean is entirely made of clouds, which from the Blue Sea doesn't look like an ocean. The Sky Ocean clouds, however, are no normal clouds. There are two kinds of clouds, Sea Clouds and Island Clouds. Sea Clouds are just as water, which means that you can sail on it if you´re not to heavy too sink through it, whereas Island Clouds are dense enough to carry all kinds of things.
There are different ways to get to the Sky Ocean from the Blue Sea. The only way that has been shown so far is the unorthodox and dangerous way in which the sailors have to take a Knock Up Stream, though it has been hinted that there is a second, slightly less dangerous way. In the Sky Ocean there are two known seas, the White Sea and the White White Sea.