The conflation goes so far back that it must be obscure, if ever a clear difference was made. Greek gaia, Avestan zam and Old Norse jorth all have the same multiple meanings of soil, land, ground, etc. The conflation seems to occur outside indo-European languages as well; Chinese characters for "the land" or "the world" are as far as I can tell derived directly from 土, soil. (e.g. semantic 土 + phonetic 也); Hebrew אֶרֶץ (erets) also seems to have this dual meaning.

I would in fact be interested in whether there is any language that doesn't conflate "soil" with "geographic region" one way or another. From that step, the generalization to "the planet" is pretty straightforward.

So, to answer your question directly: There was no such decision. The personification or generalization of the element "earth" into an entity or object encompassing what we today think of as the planet Earth is pre-historic in Indo-European culture, and probably appears independently across many cultures.

I don't know what else can be said on this topic, except to bring up interesting examples breaking this trend.

This is actually one of the first questions looked at in Carl Darling Buck's dictionary of Indo-European synonyms, known as "Buck on F*ck". https://books.google.com/books/about/A_Dictionary_of_Selected_Synonyms_in_the.html?id=PvhJCgAAQBAJ&printsec=frontcover&source=kp_read_button He said:

"The association between these various senses [of words meaning Earth/earth] is such that any one of them may be the starting point of an extension to one or all of the others.”

Follow up question: And when did we decide to call our moon, The Moon?