Waterdeep, also known as the City of Splendors or the Crown of the North, is the most important and influential city in the North and perhaps in all Faerûn. For this reason it is considered part of the Western Heartlands of the Realms, even though it lay 150 miles north of Daggerford on the shores of the Sword Coast. The city sits "slightly above the 45 degree north latitude line on Toril. The road to Waterdeep is well paved and well patrolled. The city is the hub of trading from the mineral-rich lands to the north, the merchant kingdoms of Amn and Calimshan to the south, the kingdoms of the Inner Sea to the east, and the sea kingdoms and traders to the west. Waterdeep's authority extends between thirty to forty miles from its walls. The surrounding region has a population density of over 200 people per square mile.
Waterdeep is named for its outstanding natural deep-water harbor, and the city that grew up at this site became the commercial crossroads of the northern Realms. More than 100,000 people make their home in Waterdeep. The city sprawls northward from the sea, spreading along the flanks of Mount Waterdeep, which used to be home to the Melairkyn, a mithral-mining dwarven clan, and the entire length and great depth of the mountain is riddled with passages and tunnels, most of which are occupied by deadly creatures whose presence in the mountain predated the founding of the city itself. The halls of Undermountain located beneath the city is a popular target for adventurers, who enjoyed the close vicinity of the city's main taverns and temples where aid could be purchased through donations.