The half-made world / Felix Gilman.

Enhanced descriptions from Syndetics:

A fantastical reimagining of the American West which draws its influence from steampunk, the American western tradition, and magical realism

The world is only half made. What exists has been carved out amidst a war between two rival factions: the Line, paving the world with industry and claiming its residents as slaves; and the Gun, a cult of terror and violence that cripples the population with fear. The only hope at stopping them has seemingly disappeared--the Red Republic that once battled the Gun and the Line, and almost won. Now they're just a myth, a bedtime story parents tell their children, of hope.

To the west lies a vast, uncharted world, inhabited only by the legends of the immortal and powerful Hill People, who live at one with the earth and its elements. Liv Alverhyusen, a doctor of the new science of psychology, travels to the edge of the made world to a spiritually protected mental institution in order to study the minds of those broken by the Gun and the Line. In its rooms lies an old general of the Red Republic, a man whose shattered mind just may hold the secret to stopping theGun and the Line. And either side will do anything to understand how.