Skipping lightly over such things as character arcs to get to the setting, one finds that some writers forget it. Not Tolkien. He depicted two kingdoms, one of which shattered over the years, and one of which lost its royal line, and both of which had many events over that time.
And in the Samaria books, Sharon Shinn actually had technological innovations.
There's always the question of how much people will notice. Sure, watermills proliferated across Europe during the Dark Ages, but unless you were the lucky duckie who got to see the first one built in your village, the mill was probably always there to you. Oral history, even if zealously maintained, doesn't stay accurate for more than about a century and a half -- less, without the maintenance.
Still, when a character is interested in something that's supposed to be a reflection of the vasty depths of time, it helps if there are hints that time has actually meant something. Progress -- well, they don't have to believe in progress. Samuel Johnson listed one perjorative meaning for "primitive" in his dictionary, and it was "overly solemn, pompous." It jolted me when a doctor in the American Revolution asserted of a patient that one day they would be able to cure what killed him. But change does not mean progress.
Steampunk is another matter. The Victorians were aware of Progress to an extent that seems quaint and naive. Things were changing, and they knew it. Not that they all agreed that all of them were Progress; the life of a factory worker seemed to many to be worse than that of an agricultural laborer he had once been. (Hard to compare, to be sure. And the potato had produced a burst of population growth, making life harder for the poor all over.) but they changed. And a writer has to be aware of it, not to mishmash things together because they are both Victorian. He should only yoke together things from different parts with malice aforethought.