The problem is there's two different traps the historically educated fantasy author can fall into, which will ruin their story.
A) Reader expectation - when it come to any specialist area, often the actual facts and general public knowledge are leagues apart, and this is very true of Medieval Europe. Your reader has a perception of what medieval europe was like, and to maintain suspension of disbelief you have to write to that perception, even if it doesn't align with reality. The number of myths and misconceptions that abound about medieval europe is just astonishing.
B) Reader empathy - ultimately you need your reader to feel empathy for your characters, otherwise the entire story falls apart. It won't matter how realistically the setting is realised. The problem is, actual historical people from different periods had quite dramatically different values to us. Reproducing those values authentically may drive a wedge between your characters and your reader. Sexism, racism, and religious bigotry have all been standard for many human cultures. Even the innocent good-natured medieval hero is going to be sexist, racist, ethnocentric, intolerant of other religions, and generally awful to a modern reader.
So in order to maintain empathy we have to fudge social values somewhat.
Well said. Very true.
There's also that underlying assumption that all fantasy stories are set in medieval Europe or than all authors writing in a quasi-medieval environment are trying to faithfully reproduce every aspect of medieval Europe in terms of knowledge, government and social organization. Not every ancient society was feudal, for instance, and there were ancient cultures that had sanitation, infrastructure and social institutions that were much more advanced than what is typical in medieval Europe.
And once you bring magic into the picture, you can tweak a lot of things. It's part of the fun of fantasy. I enjoy taking certain liberties with history, but I do try to do some research to see if a pre-industrial society could ostensibly support something, magic or no magic.
Still, once in a while, someone will "inform me" that such and such didn't exist in medieval Europe, when in fact it did (or could have, given the situation I've presented), and my society is not really "medieval" anyways.
You can't please everyone, though.
[sorry about the two posts; I thought I was editing the first one instead of creating a new one. Silly me]