It is absolutely integral that Writers are aware of the intricacies of their characters, their environments, and their plotlines. Knowing about all of these things is essential to creating a three dimensional story that will keep your reader engaged.
The problem sometimes lies in too much of this information being shared.
We have all read a story that looks like it is coming to a natural conclusion but then for some reason keeps going for an extra unneeded addition. Or maybe a piece that has a strong premise, but gets caught up in repetitons of the same thoughts but using different words. Or, my longtime example from a famous classic Writer, using 10 pages to describe how a character (not even the MC) got down three steps whilst drunk.
None of these things are terrible faults on the part of the Writer. They are often just over eagerness to show they know the world they have created and the people within it. It is easy to get caught up in a world that you are breathing life into on your pages and not see the necessary from the unneccessary.
Unfortunately, as far as the reader is concerned, these are pretty bad faults; which can sink a book and the writer in their estimations.
What the Writer needs to be able to do is take a step back. Easier said than done, and often said, I know. This is where beta readers (not just friends and family) and your Editor are extremely valuable commodities. Listen to the feedback that they give you - even if you have a reason to explain away each comment. Allow their fresh perspectives to enlighten yours. Do not worry that they are trying to change your manuscript into something that it isnt. Every person that reads your book will see it differently. That is the charm of books. (And the downfal of many movie adaptations!)
But most of all, know that your reader does not need to know as much about your book as you do. Just because you know something, does not mean it needs to be shared. Give your characters rounded personalities, absolutely! But we dont need to know every single meal they have had since childhood unless that is of particular relevance to the plot. Make your environments lush and intricate if that is your style, but know where they stop and your story begins. And most of all, make sure that all of your plot is not only relevant, but necessary. In many cases, the old addage goes a long way: leave them wanting more.
This is an over simplified set of statements, I know. But use it as a reminder. Ask yourself the questions. And dont be afraid if someone else asks them too.