The Ghostlands was already cursed for ages even during the founding days of Carlin. Unease befell those who wandered there and the area was avoided whenever possible.
After the female reign of Carlin was established, the independent city tried to expand its influence and settlers were sent there to claim the nearby area. Soon they where troubled by nightmares and bad omens. People hallucinated and became agressive if not even outright mad. Serial killings, berserk rages and strange but lethal accidents became commonplace until the people moved back to the city.
The Queen was displeased but their citizens would not try again. So the Queen sent the druids to cleanse the area. As they returned weary and wounded with three of them missing, they explained that the area was cursed, haunted and lost to humanity. The Queen argued but the druids where adamant in their opinion.
The conclave of druids decided to seal the area with magic wards and magically erected a hedge which they empowered with magic. The Queen was not happy but did not intervene to stop them.
Since then the area is known as the Ghostlands (and several other nicknames suggesting the same). Despite it's name there are only ghosts located deep below the surface there.
Some information about this try of colonisation can be obtained from Dalbrect.
Half-destroyed graveyard is located deep below surface.
Note that the vampire isn't reachable (it is on the 5th floor, northeast part of the northern cave in a room behind a wall), and that there's only one Giant Spider, decribed below. Maps of the third cave:
1st floor: Archivo:Ghostlands Third Hole Floor 1.png
Be careful while hunting on this cave, because there is a room full with poison spiders and a Stair. Down the Stair is a Giant Spider, but once you go down, you can't go up again because it's closed with jail bars.