KatsBits walks through creating a low polygon terrain by using Heightmaps and displace in Blender covering creating a Heightmap, setting up the scene, and displacing the mesh.

Check out the tutorial for Creating a Simple Terrain in Blender Using Displace here.

KatsBits writes: Although making a terrain is generally regarded as being the most problematic asset to produce for game related projects, it need not be. Using the “Displace” modifier in Blender provides a quick way to create terrain meshes so long as a few ground rules are followed. The following video tutorial runs through the basic process, making a simple terrain in Blender.