And it's not just because it's cool or exotic, no, fantasy clothing can go so much farther than that. Sure, chain mail, dresses, ball gowns, tiaras, hoods, and cloaks are all very cool, but there is something deeper to them too.
The way people dress helps express who they are on the outside. For instance, my everyday winter outfit is a flannel shirt, jeans, leather/military jacket, boots, and occasionally a plain headband. My eleven year old sister who I like to call Merry on my blogs is very different. Her everyday winter outfit consists of funky colored pants, shirts that inevitably have sparkles or sequins on them, headbands adorned with jewels or flowers, jingly bracelets, earrings, necklaces, and colored sneakers. Needless to say, she is the fashionista of the family. But don't you get an idea of our personalities based on the clothes we like to wear?
Fantasy outfits can be even more fun! They can help flesh out characters and make them realistic by having them have opinions based on their clothing styles. But I think there are some rules too. You can't usually just go all willy nilly and have one character wearing chain mail and armor with another soldier wearing a Kung-Fu tunic and trousers. Maybe you could, but probably not. I think the best plan for fantasy writers is to select a real historical time period and base their fantasy culture around it. Most fantasies are medieval fantasies. Tolkien based 'Middle-Earth' off of Celtic and Nordic cultures and mythology. Once you do that, you are ready for costuming!
I'll give an example from my books. I actually based 'Holdinus', the Ember Flame world, off of modern American culture. I thought it would be different and fun, and I did indeed have a lot of fun with it. I could keep typical fantasy items like swords and castles, but still have high technology like GPS' and chips. All that to say, my characters' outfits were actually semi-modern but with some twists.
For instance, I always pictured Ember wearing a mini-skirt, perhaps a jean mini-skirt, and a long sleeved fleecy shirt. Perhaps a belt for hanging axes and satchels off of, and then, of course, a hood and cloak. I never really described her outfit in 'Ember Flame', but that is how I pictured her. It gave her a rebellious yet defensive look to her. Hard and soft. Vulnerable yet tough. (And yes, that is Lina from 'City of Ember.' Ember looks NOTHING like her, but her outfit it very similar to what Ember would wear.)
Hail, on the other hand, would be based off of your average thug nowadays. I kinda pictured assassins to be the thugs of Holdinus. :P He wears a black leather shirt and pants, along with thick boots for trekking through snowy mountains. He would wear a long black cloak with a hood, and he would usually be wearing the hood even indoors. (It is Richard Armitage. He is playing Guy of Gisborne. How bout I just go ahead and admit I want Hail to BE Richard Armitage???)
It's incredibly fun fleshing out characters through their clothing. Here are examples of clothes affecting emotion from other fantasy novels:
Ella Enchanted by Gail Carson Levine
'Although I suspected Father wanted me to wear another mourning gown, I put on the frock Mother liked best. She said the spicy green brought out my eyes. I thought I looked like a grasshopper in it--a skinny, spiky grasshopper with a human head and straight hair. But at least the gown wasn't black. She hated black clothing.'
Starlighter by Bryan Davis
'Jason looked up at the royal box where Governor Prescott sat. His bodyguard stood next to him, always watchful, always ready to defend the governor against attack---the best swordsman in the land, Jason's brother Adrian Masters. From his soldier's uniform to his polished leather boots, dark gray trousers, and flowing, long-sleeved forest green shirt, he looked very sharp, especially with the sword and belt attached to his hip.'
The Two Towers by J.R.R Tolkien
'The woman turned and went slowly into the house. As she passed the doors she turned and looked back. Grave and thoughtful was her glance, as she looked on the king with cool pity in her eyes. Very fair was her face, and her long hair was like a river of gold. Slender and tall she was in her white robe girt with silver; but strong she seemed and stern as steel, a daughter of kings. Thus Aragorn for the first time in the full light of day beheld Eowyn, Lady of Rohan, and thought her fair, fair and cold, like a morning of pale spring that is not yet come to womanhood. And she now was suddenly aware of him: tall heir of kings, wise with many winters, greycloaked, hiding a power that yet she felt. For a moment, still as stone she stood, then turning swiftly she was gone.'
(Can I just say that I LOVE this description? It's got action, vivid description, characterization for both Eowyn and Aragorn, brilliant metaphors, AND a teensy touch of romance? It's genius.)
North! Or be Eaten by Andrew Peterson
'The Florid Sword leapt from the roof of the cobbler's building, bounced off the canopy, flipped through the air, and landed graceful as a cat behind Sneem. He wore a black cape, black boots, and black gloves, and had black hair that hung to his shoulders. Everything about him was black as coal, including his mask. The whites of his eyes shone. He thrust his narrow sword and put a grisly end to the Fang. Janner caught the white flash of his teeth when the man smiled. "To be sure, Sneem, thou fiend, the Florid Sword hath run you through like unto a bolt of iron lightning piercing the watery depths of the Mighty Blapp, may she run wide and muddy all the days of mine own life! Flayed by my blade! Aha!"'
Also, you can use clothes to compare different races. Compare Hobbits to Dwarves.
Hobbits dress like your average 19th century English gentlemen, albeit without shoes. They always look neat and clean and ready for a visit with the neighbors.
Dwarves on the other hand, dress like Nordic Vikings ready to go plunder some village or hidden land.
Let's go ahead and throw the Elves in there, who look like noble princes and princesses from a fairy tale.
All that to say, clothes are an important part of life today and I think fantasy writers ought to take advantage of the emotional and vivid pull they can have on a reader.