In his "General Preface to the Novels and Poems" (Wessex Edition. London: Macmillan, 1912) Hardy explains his concept of Wessex as follows:
It is advisable also to state here, in response to inquiries from readers
interested in landscape, prehistoric antiquities, and especially old English architecture, that the description of these backgrounds has been done from the real –- that is to say, has something real for its basis, however illusively treated. Many features of the first two kinds have been given under their existing names; for instance, the Vale of Blackmoor or Blackmore, Hambledon Hill, Bulbarrow, Nettlecombe Tout, Dogbury Hill, High Stoy, Bubb-Down Hill, The Devil's Kitchen, Cross in Hand, Long-Ash Lane, Benvill Lane, Giant's Hill, Crimmercrock Lane, and Stonehenge. The rivers Froom, or Frome, and Stour, are, of course, well known as such. And the further idea was that large towns and points tending to mark the outline of Wessex -– such as Bath, Plymouth, The Start, Portland Bill, Southampton, etc. –- should be named clearly. The scheme was not greatly elaborated, but whatever its value, the names remain still.
In respect of places described under fictitious or ancient names in
the novels -– for reason that seemed good at the time of writing them –- and kept up in the poems –- discerning people have affirmed in print that they clearly recognize the originals: such as Shaftesbury in ‘Shaston,’ Sturminster Newton in ‘Stourcastle,’ Dorchester in ‘Casterbridge,’ Salisbury Plain in ‘The Great Plain,’ Cranborne Chase in ‘The Chase,’ Beaminster in ‘Emminster,’ Bere Regis in ‘Kingsbere,’ Woodbury Hill in ‘Greenhill,’ Wool Bridge in ‘Wellbridge,’ Harfoot or Harput Lane in ‘Stagfoot Lane,’ Hazlebury in ‘Nuttlebury,’ Bridport in ‘Port Bredy,’ Maiden Newton in ‘Chalk Newton,’ a farm near Nettlecombe Tout in ‘Flintcomb Ash,’ Sherbourne in ‘Sherton Abbas,’ Milton Abbey in ‘Middleton Abbey,’ Cerne Abbas in ‘Abbot's
Cernel,’ Evershot in ‘Evershead,’ Taunton in ‘Toneborough,’ Bournemouth in ‘Sandbourne,’ Winchester in ‘Wintonchester,’ Oxford in ‘Christminster,’ Reading in ‘Aldbrickham,’ Newbury in ‘Kennetbridge,’ Wantage in ‘Alferdston,’ Basingstoke in ‘Stoke Barehills,’ and so on. Subject to the qualifications above given, that no detail is guaranteed, – that the portraiture of fictiously named towns and villages was only suggested by certain real places, and wantonly wanders from inventorial descriptions of them.
Source: Orel, Harold (ed). Thomas Hardy's Personal Writings. London: Macmillan, 1967. 46-47.