For the most part these images are 2D. The final composition is put together in Photoshop. In fact a good bit of it is 'painted' in Photoshop. There is however a huge amount of Illustrator work involved as well.
I'm usually provided with either hard copy drawings of the area of interest or CAD drawings. If it's cad drawings I can go right to work since they are already in a digital format. If I'm given actual drawings on paper I need to scan them in first.
Once I have my drawing, even if it's digital, I still need to take it into Illustrator first in order to create closed paths of each area and shape. Those closed paths will then be imported into Photoshop where I can use them as masks. Essentially I use them do do a form of digital airbrushing.
Most of my work is 3D based but it's nice to work in a more traditional manner from time to time. This type of illustration provides the perfect opportunity.

I mentioned that these are 2D images for the most part. The truth is there is a limited amount of 3D involved in these images as well. The tress are actually topview renders of 3D modeled trees. I started using these type images for trees along time ago because they looked more natural. 

The people are actually 3D models as well, rendered out in a separate program and brought in and scaled to size. All in all these images are usually a lot of fun to do.