You can live or hail from the following places:

Earth kingdom (any city or down from there, make it up. Applies to the other kingdoms too)
Northern water tribe
Southern watertribe
Fire nation
Western Air temple
Eastern Air temple
Southern air temple

You can have the following occupations. This is just an idea to know what all you can take up.

Part of the King's court (in the earth kingdom), king's guard, servants, army, shop keeper, a teacher, a master of arts or a bending school or even just a student. Basically any normal occupation is also accepted.

THIS IS SET IN THE MEDIEVAL TIMES SO ALWAYS KEEP THAT IN MIND.