I think I found the inspiration for the entity, his realm, and the lore after a while of searching.
I have always wondered how the developers came up with the idea of the entity's realm or the lore of the game, but recently I came across something. Okay, so the entity's realm isn't on earth and is in an entirely different realm, it might even take place in your mind, but there are consequences. This concept is similar to going todash in the dark tower series. In todash you can travel to a place in your mind, but it takes place in a different realm. The entity's realm also can be a leak in reality where you can travel to a place that isn't in your mind. This concept is very similar to the thinny in the dark tower series. The thinny is a leak in reality where the fabric of reality has worn thin. The thinny is also a large blob, which is also looks similar to how the entity itself looks. I also find the hillbilly's backstory to be very similar to a character from the dark tower series called Patrick Danville, who was trapped by a man called Dandelo who is a relative of Pennywise. I can't think of any other similarities, because the dark tower and the lore of dbd seem very similar. Or maybe they take place in the same universe, and the entity is a servant of the crimson king that rose from the prim.