[Roodgorf]

You may have only played the Xbox version, which did have a strict constraint on the map size. The PC version, IIRC, has no such restriction aside from perhaps memory and/or maximum possible values. The Far Lands referred to are actually a result of this lack of constraint allowing the player to reach a point where floating point errors begin to wreak havoc on the map generator.

[tehbeard]

Most PC servers have limits enforced to prevent runaway disk usage.

In fact it's now baked into the vanilla game as a command.