Twill is a old city, far older than almost anyone living there suspects. The first settlement on the site dates back to the last years of the Fay. As the surface world was becoming increasing dominated by the free-races, the region around Twill became the front line.
The Fay built up their armies of goblinoids in underground breeding pits but they needed a staging post where the troops could exit the dark and assemble on the surface. A cave on the banks of Lake Twill proved perfect and a semi-permanent camp was established around it. The camp quickly acquired wells, stone buildings and fortifications. Though almost everything in the city has been destroyed and rebuilt several times since then, one or two traces of the original buildings can be found and at least one Fay well is still in use.
Eventually the rebellion captured the Fay's camp and destroyed the entrance to the Underworld. However the location of the camp was useful, the buildings the Fay had built were solid and the wells were good so the free peoples established their own camp here. As the Fay died out and the rebellion ended, the camp turned into a permanent settlement.
Over the next ten thousand years the fortunes of Twill have ebbed and flowed. At times there have been fewer than five hundred inhabitants living in the ruins of a once great city. At other times it has been a major a city-state, wealthy and powerful. The city has burnt down, been flooded and once even struck by an meteoroid. Invaders have besieged it, looted it and raised it to the ground. The population has endured plagues, riots and genocide and yet still the city stands.
The reasons for Twill's longevity is simple. It is in a good location where people want to live. The lake, with its regular floods, provides fertile farm land and a cornucopia of fish. Building materials such as wood and stone are plentiful. The lake area is effectively a large valley with the mountains on one side and the steppe on the other and this shelters the city from the worst of the weather. Finally, it is on the only viable land route between the eastern and western lands and a transition point between land and river travel.
The current city can trace its origins back about four hundred years to when the Empire of the Divine Hand was establishing itself and the demand for goods such as iron grew. At the time, Twill was little more than a village with a handful of satellite communities. A few dwarf settlements could be found in the mountains and a band of halfings had established themselves on a small island in the lake.
As the Empire grew, both it and its nervous neighbours need more weapons and other goods. There was also an increase in people fleeing the war-torn border areas for safer lands and Lake Twill provided the perfect location. It was Lord Twill, the first 1st Lord, that took about rebuilding the city of Twill. He built the current castle on the ruins of much older fortifications and this became the cornerstone of the new city.