THE DECEMBERISTS Portland’s most decorated band? Or just weirdos in costumes under a bridge?

HOW DO YOU KNOW when you've made it as a rock band? Is it when your hometown gives you your very own day?

January 20 was declared Decemberists Day in Portland—the same day the Decemberists released their seventh album, What a Terrible World, What a Beautiful World. The band performed as a mayoral proclamation was read and a collaborative art piece was unveiled, and from the Decemberists' perspective, the experience may have been more bizarre than anything else. Lead singer and songwriter Colin Meloy was recovering from an illness on that particular day. "However surreal it was," he says, "it might have been a little bit colored by that. But it was really fun. It was cool."

As to how it came about, Meloy says, "Somebody had suggested it to city hall and they were game for it. It was surprising how easy it was. It might have even been somebody from our label. I think it's actually a fairly easy thing to do, as it turns out. I would recommend that anybody at least contact city hall to see if they would be willing," he jokes. "I mean, not to diminish it. They've got a lot better things to be doing than naming days after bands. It was a kind thing for them to do."

In some ways Decemberists Day marked the finish line for the incubation process of What a Terrible World, What a Beautiful World. The album was born after a hiatus in band activity following 2011's The King Is Dead. During that period, four-fifths of the Decemberists—guitarist Chris Funk, keyboardist Jenny Conlee, bassist Nate Query, and drummer John Moen—sowed their wild musical oats with Black Prairie, while Meloy and his wife, illustrator Carson Ellis, created the three volumes of their Wildwood trilogy of young-adult novels.

"I was working on the books over the last four years, and that was my primary objective," Meloy says. "And it allowed me to kind of use songwriting as a procrastination tool from my day job, which is what songwriting had been to me for as long as I did have a day job. I don't know if I really got back to that, or if I was being overly nostalgic or sentimental or precious about it, but it was nice to be able to do songwriting as a side thing for a little bit, and not have so much pressure."

For What a Terrible World, the band took the recording process at a deliberately slow pace, recording songs piecemeal rather than tackling the full album in one fell swoop, as they'd done in the past. For a time, the protracted gestation meant that the final product remained slightly out of focus.

"It was kind of nice when it wasn't in view," says Meloy. "That's the part of the process that I cherished. I mean, we knew eventually it would come together as a record, but the shape hadn't shown up, so we were just kind of booking time sporadically, getting together, playing music, recording it, and then stepping away from it—and then booking more time. I think that was the funnest part to me. Six or eight months into the process, things started to take shape, and the record label started to get involved, and we started to talk about release dates and tour dates and things like that, and that's when it started to resemble our old way of working. It was a little bittersweet when that day came."

The finished album is a distinct broadening of the sound of 2011's The King Is Dead, which was itself a step back from the grandiosity of the band's 2009 concept album The Hazards of Love. What a Terrible World continues to mine a vein of Americana the band has begun to gravitate toward naturally. "Maybe my obsession with the Smiths took a little bit of a backseat for the last couple of records. Or the British folk revival—my obsession with that really became a big part of what we did for a while," Meloy says.

It's a warmer, more heartfelt work than some earlier Decemberists albums, with a more perceptible personal touch and some of the literary whimsy toned down in favor of directness. "12/17/12" is Meloy's gut reaction to the shootings in Newtown, Connecticut, and stands as the emotional heart of the record. Album closer "A Beginning Song" tackles the difficulty of direct communication with a loved one, revealing the attendant dueling sensations of doubt and determination; it closes the album on a peak. And opening track "The Singer Addresses His Audience" deals, comically, with themes of success and mass appeal, although it might actually be the sort of song Meloy craved to hear during his own teenage years.

"There is a bit of me being the fan in the equation of that song," Meloy says. "The song itself I think of as being an exploration of that weird relationship between the performer and his or her audience, and it's something I've been mindful of ever since I became a music obsessive. I was steadfastly protective of my bands, but also would be betrayed and angry with them if I got a hint of them selling out or doing something that was somehow against type. Or even if they're just kind of getting old, or it felt like their songwriting was stagnating.

"So yeah, it was part of me addressing my younger self as, potentially, a Decemberists fan," Meloy continues. "Though that's the other thing: Would I be a Decemberists fan if 17-year-old me had come in contact with us? I don't know. It's a tricky question. It's terrifying. I think that I might have been tearing us to shreds as soon as we signed to Capitol. I would have been that asshole. You don't want to examine it too closely."