Top Down Template - Limit Walkable Locations

Hi all,
I’ve noticed that in the default top-down template, player can walk wherever he wants to and even fall high areas. In top down games like Diablo/POE the player can’t walk anywhere he likes (for example can’t click and walk into the water, can’t fall from high areas or at all etc…). I was wondering if all of this is actually done with blocking volumes or is there a way to configure this in the level/character itself?