Daggerdale used to be all rolling wooded hills broken by labyrinthine rocky valleys. But that was before the cataclysm and the collapse of large portions of the Underdark. The land sank, causing the River Tesh to flood out of its banks. Now the entire northwest portion is a giant swamp known as The Caladan Brood. Whole villages and towns were lost in the bog as were many other, more secret things.
The narrow strip of dry land between the Brood and the Dagger hills and north of the hills but still below the Dragonspine mountains is good grazing country for livestock, but large ranches are mostly confined to the region around Dagger Falls. That name applies both to the steep waterfall and to the frontier town hard by (population 2,000).
There are exclusive ranches selling the finest cattle further south below the city of Tethyamarside and north of Anathar’s Dell. They’re a close knit but friendly (and rich) community, trading their livestock to the wealthy cities further south, rarely dealing with the northern inhabitants of Daggerdale.
The Desertsmouth Mountains tower over the hills of Daggerdale. A great dwarven kingdom called Tethyamar once occupied the Desertsmouths. Several hundred years ago, it fell to orcs, ogres, evil wizards, and fiends—some of which still lurk in the peaks.
A century ago, Daggerdale was ruled by agents of the Zhentarim crime syndicate / Bane worshippers, but that occupation is a distant memory today. Daggerdale has been increasingly troubled by humanoids raiding out of the Desertsmouth Mountains, strange creatures boldly slithering and slurping out from the edge of the swamp and by a resurgence of lycanthropes infesting the crags of the Dagger Hills. As a result, the frightened villagers of Dagger Falls have become isolated and cut off from the other dales.