Create a neutral background color and place a smaller white rectangle on another layer inside it.

With a round, hard edged brush, place "scallop" dots along the edge.

Change the color to a pale tan to give it an "aged paper" look, and apply a Bevel and Emboss layer style.

Create a shape for the ground, and apply about 60% monochromatic Gaussian noise to it.

Apply a vertical Motion Blur to make the noise resemble blades of grass, and adjust the contrast, hue, and saturation to make it varied.

Duplicate the ground layer and use the paintbrush at a reduced opacity with various ground colors to create a color wash layer.

Create a gradient layer of blue to purple, and place it above the cloud photograph.

Apply a surface blur to the cloud layer to make it look more "painted."

Position the cloud layer and gradient on top of the scalloped postcard layer, leaving a bit of the border visible.

Place the motion blur grass layer above the cloud layer, position the Color Wash layer on top of that, changing it's Blending Mode to soft light.

Duplicate the chessman image 2 times, and position the 3 layers on top of the grasses and clouds, using the Free Transform tool to resize and skew the layers to taste.
Erase the bottoms of the chessmen, and use the blur tool to better blend the bases to the ground.

Create a New Layer, and with a small paintbrush at reduced opacity, paint overlaying grasses and shadows to blend the chessmen and the ground.

Add Text layers, and you're done!