Puns can be awkward in a fantasy world, because the pun has to be workable in the language that you are ostensibly translating from.
For example:
Person One: "There's something fishy about your actions!"
Person Two: "Nah. I did it for the halibut."
That pun doesn't work in German, no would a German attempt it.
Well, the way I see it, if everyone in the story is
communicating in the same language, there should be sufficient suspension of reader disbelief in using puns that would work only in, say, the writer's native tongue. It's all translated through the narrator after all, if English (or whatever) isn't the tongue being used.
The characters in my story are of various American Indian tribes, traveling with a modern-day American MC who has a device that helps translate all their speech so they understand each other. Meaning, any puns made in any language would translate over into the others. At some point one of the goofier native characters, collecting acorns, says that a friend of his makes great stew from them, but he doesn't use real acorns. When the MC asks, "Fake acorns?" he replies, "Yeah! He calls them 'fakecorns'!"
Even more than puns though, I find that cultural misunderstandings and differences can provide great humor. (At one point, my MC is appalled that the rice is flavored with maple sugar, not understanding that this is normal here; at another point, she wonders why one character is so embarrassed when she throws a blanket over his shoulders to warm him up, and learns that she was in fact asking him to marry her--"I suppose if I tie my shoelaces a certain way it must mean I want ten kids?" she grouses later on.)
And funny things based directly on the world being written about in the fantasy. Many of the jokes and funny events in my story wouldn't make sense outside of the fantasy world they take place in. (Along both lines here, puns and cultural specifics, the spirits in the world I write about are called "manitous" and can inhabit almost anything. My MC at times combines the word "manitou" with the item or being that has a spirit--loons become "loonitous" and a canoe becomes a "canoeitou." The canoe, which is sentient and made of stone, also provides some humor when it compares its own life, countless millennia spent up in a mountain waiting to be carved out, to that of the 15-year-old human MC--a running gag is that she hates being called a little girl, so when the canoe calls her a "foolish little pebble," she's infuriated.)
See, none of this would be funny or make any sense whatsoever outside my particular story so I hope you catch my drift.
The best comedy is based on the specific world you're writing; that's what makes it so funny, it wouldn't make us laugh otherwise.
