The Shadows section decides whether each light is blocked by the geometry in its way. The shadow is traced by rays against the real mesh, not through a depth map, so it has no resolution limit and none of the stair steps that show up in the viewport.

Controls

Enable shadows: Turns the shadow test on. With it off, every light goes through everything, and the model loses contact with the ground.
Softness: The apparent size of the light in the sky, in degrees, from 0 to 10. At 0 the source is a point and the edge comes out perfectly sharp. Raise it and the light starts to cover an area, so the edge gains a penumbra that widens with the distance from the object casting it.

How to use it

A midday sun is almost a point: keep the softness low. An overcast sky or a large fixture spread the shadow out, and there values from 3 degrees up make sense.

The penumbra is computed with several rays per pixel, so a very soft edge asks for more Antialiasing samples to avoid graininess. If the whole image still feels detached from the ground with shadows on, what is usually missing is ambient occlusion, which darkens corners rather than casting the shadow of a light.