Usually GMs put in a lot of time. In some cases, one or two hours of prep per hour of game time. In some cases, 20 or 100 hours of prep per hour of game time.

Usually GMs put in a lot of time. In some cases, one or two hours of prep per hour of game time. In some cases, 20 or 100 hours of prep per hour of game time. And then they usually do a very bad job of most or all of the things you mentioned, and it doesn't matter because playing Let's Pretend is just inherently fun. Remember, of course, that they only have to have all that world knowledge to a degree that permits suspension of disbelief. Often the GM is more committed to learning how society works than most of the players, so the bar may be pretty low. And with respect to the acting skill, remember that one or two crazy set-piece speeches are usually desired, but aside from that, most people are more interested in telling the story about their character that they want to tell, so in many play groups, the savvy GM just puts most of the acting burden back onto the players, who like it better that way anyway (though groups vary widely in this regard). And with respect to improvising constantly... some GMs are good at this, but most are not, and so most play-groups have spoken or unspoken rules that they'll be good and behave in moderately predictable ways, to narrow down the chaos that is created. Again, the main thing that makes it work is that sitting around the campfi^H^H^H^H^H^Hgaming table, telling brag stories, is inherently fun, and it's even more fun if there's suspense, and outcomes you've chosen to care about, riding on the roll of a die.