As a writer, I can assure you that, depending on the circumstances, creating new words can be a necessary part of the story telling. For example, in sci-fi, a writer will create a society and a new language for that society. I do that in my stories, I invent languages and, consequently, will invent words for items that have English words for them. However, once it's established that there is a different language being translated, I will return to the correct English words.
It's a very useful vehicle for worldbuilding, and I would encourage it with two caveats: one, that the term's meaning and connection can be easily intuitively gleaned, and two, that it's flavor and the terms themselves are not the focus of the story or overly harped on, because then it seems like you're trying to market a term rather than tell a story.
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