Nope, only need to load parts where things are happening and even then just what is needed.
Need bit more information maybe. From whtemple1959's message it sounded like RPG or adventure game. In any case, you can't have the whole world "living" at the same time. If you have key structures like airports or such, they can be separate objects from the terrain entirely. Can send aircraft to different airports and so on. Just when you load their area you would see them visually. Single cars in city streets, there's no reason to simulate that for whole world at all times.
Slightly related on topic is 1 of my units in nxPascal. Capable of keeping a huge world loaded up in memory at the same time. Unused parts are compressed, and used parts are automatically recompressed after certain time of no use.
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