The action takes place in the Grand Duchy of the Karameikos.
Hopefully nothing in this section or its sub-pages contravenes anyone’s copyright. It is mainly cribbed off various publications and lots of fan derived stuff on pandius.com and mystara.net.
The Grand Duchy is ruled by Stefan Karameikos, the Grand Duke, as an effectively independent fief of the Thyatian Empire, that is going through one of its periodic bouts of introspection and decadence. Duke Stefan was originally Duke of Machetos, a prosperous part of Thyatia, but some thirty years ago, as a result of court intrigue, was ordered to surrender his Duchy and was sent into virtual exile as lord of this ungovernable frontier march. Since then though, the dynamic and energetic Duke has pursed an active role in pacifying this realm and bringing it under his control, to the point of virtual independence. For this reason, he has encouraged the growth of the Minrothrad Guilds as a counterweight to the Thyatian navy, and is actively promoting the pacified Karameikos coastline and his capital of Specularum as a safe trade route from Dorukin to Thyatia.
The population of Karameikos is actually probably 80% Traladaran, with only 5-10% Thyatians and the rest various demi-humans. The Traladarans have been settled here for thousands of years and have their own culture, which harks back to an imperial period almost a thousand years ago, that was shattered by waves of humanoid invasions, which were finally repelled but at the cost of most of the population and cities of Traladar. The Traladarans are resentful of the Thyatians, who have seized much land and placed themselves as a nobility over the Traladarans, but several rebellions in the early years were ruthlessly suppressed and they have remained quiet for the last 20 years. It helps that Duke Stefan is broadly a fair ruler and that his armies have brought a degree of safety and security that had been lacking before his arrival. Much of southern Karameikos is now settled and peaceful, and the Duke’s armies patrol frequently in adjoining areas to try and keep the forest goblins and other humanoids under control.
A map of the Grand Duchy of the Karameikos