There are few elements I consider required for game to be considered sandbox:
*Skill progression based on what you do. You shoot arrows? Your ranged skill goes up. You take alot of hits? Your defense skill goes up. You chop alot of wood? Forester skill goes up. You swim alot? Swimming speed goes up. There should be noticeable diminishing returns the higher skill goes up and the more skills you have. Achieving super high rank in some skill should be a challenge only few people on server will overcome. You will know Joe is the best sword user, Maggie rules with doublewielding axes, if you are looking for superb potion maker pay the man to see is Ed. Stuff like that, sense of reputation, community should be the core.
*Minimal or zero instancing. Everything is happening on the same world available to all people on server. This requires the game world to be substantial. What you do will have impact on the world and everyone who plays in it.
Example:
They may be areas where you can get access only when lumberjack with skill of 100+ cut down trees. They will grow up back in few days.
To kill special boss everyone in party will be required to drink potion X, only potion maker with skill of 150+ can craft.
Once you kill the boss, noone else can kill it until it respawns.
*Crafting should allow you to make up your own recipes, explore world to find special materials that are unseen for others who did not develop your scavenging skills. You should be able to experiment, doesn't matter that 50 tries will be crap, but 51th can be the gem that will get you recognition. Crafting should be viable way how to progress your character. Great pvper, raider, crafter, explorer should be on relatively same strength to each other.
*Noticeable death penalty. If you die, you lose something that will cause some setback, be it experience, skill, gear, money loss any combination of that. When they reduced death penalty in modern games, almost every sense of exploring, adventure, caring about your character vanished. You are not feeling adrenaline when you enter dark cave, travel through rocky mountains, delve in forest labyrinth. You are not trying to survive and fight for your life when a pack of unexpected mobs jumps you.
*PVP: Attacking other players should be available almost everywhere. Only small zones would be protected, like banks, crafting areas. I think it will be better if there was no-pvp server option as well since many people are not prepared for real open pvp game. Because of death penalty, killing a player will be something significant. Victim will lose quite few things and the killer will gain. To prevent mindless griefing there should be soft limits on how many people you can kill and penalties for breaching them. Strong guilds can enforce ruling of certain hunting areas, controlling travel routes or resource spots. Solo players will have smaller chance to survive, grouping and guild will be something you pretty much have to do. Guild wars will have huge stake in it for all parties, just like are wars for resources in real life.
There are more things this is just on top of my head.
edit: Also I want to say that many people think they want sandbox game, but if true sandbox game were presented to them they wouldn't like/play it. The truth is real sandbox game does not cater to majority casual players of this time who just want to hop in the game for and hour and get a reward for it. Sandbox game presents a time commitment which you should treat like hobby and expect to play such game for couple of years or like 6 months minimum.
TLR Players are the force that shapes how the game on the server looks. Developers are there to deliver tools and keep players from going apeshit and using the tools to destroy the game.