The terrain system in Unity is very limited. You're basically limited to creating height variations. You could find a voxel plugin for Unity, albeit they are expensive performance wise. A lot of times people just combine basic terrain in Unity with more detailed 3d meshes created externally.
If combineing 3d meshes created externally is it possible to apply unity terrain to these meshes? Also I wonder if the terrain is positioned on the 'Y' axis will the terrain still create height variations?