Use the Prismatic Art Collection as a source for fantasy avatars
I love that you want players to only use images for which they have permission and rights for avatars - but the reality is the vast majority of us have no access to such images. This wouldn't be a problem except that avatars are required for characters.
I see there's already a plan to include a gallery of avatars in a future update; I'd suggest for fantasy worlds it'd be worth checking out the Prismatic Art Collection. It has characters of a variety of genders and ethnicities, all released under a Creative Commons license.
You can find the collection here: http://www.prismaticart.com
This is great, thank you for the tip! Do you happen to know of any other similar projects that might include other genres?