The Phantom Tollbooth may start and end in a nameless city in the real world, but its true setting is the fantasyland to which Milo travels when he passes through the tollbooth: the Lands Beyond. And what, exactly, are these lands like? Well, there's actually a map! Yep, that's an authorized look at the layout of the Lands.
For those of you who are a little more interested in the broader geography of the Lands, let's take a closer look at that map. According to the title, it's supposed to give readers a sense of "The Lands Beyond, including a description of the several towns, boroughs and municipalities comprising the kingdom of Wisdom." Okay, so the map goes from left to right: the whole right edge is the body of water called the Sea of Knowledge. Milo enters from the center left, and he hits the following landmarks: the Doldrums, the city of Dictionopolis, the Forest of Sight, the Valley of Sound, the island of Conclusions, and the city of Digitopolis. The big climactic finish takes place in the Mountains of Ignorance, which are in the upper right.
Got all that? Okay, now let's zoom in on a couple of areas in the Lands Beyond to get a sense of their scope.
In some cases, the settings take on the characteristics of the people who live there. For example, words are the most important things in Dictionopolis. So the grandest building there, the king's house, resembles a "book":
It was a strange-looking palace, and if he didn't know better Milo would have said that it looked exactly like an enormous book, standing on end, with its front door in the lower part of the binding just where they usually place the publisher's name. (7.5)
In comparison, numbers are the most important things in Digitopolis, and so Milo finds out that the Mathemagician constructed a home featuring a rather strange, number-influenced room:
[It was a] strange circular room, whose sixteen tiny arched windows corresponded exactly to the sixteen points of the compass. Around the entire circumference were numbers from zero to three hundred and sixty, marking the degrees of the circle, and on the floor, walls, tables, chairs, desks, cabinets, and ceiling were labels showing their heights, widths, depths, and distances to and from each other. (15.33)
As you can tell, the make-up of a place is based entirely on the preference of its leader (be it for words or for numbers). We wouldn't mind living under Prince Cake and Ice Cream's domain, that's for sure.
The different parts of the Lands Beyond, as the setting, contribute to The Phantom Tollbooth as an allegory. (Basically, that means that what happens in the book really means something else, too: there's a double meaning for which we should be on the lookout. For more on this, check out "Symbols, Imagery, Allegory".) The relationship between places and meanings might be clearest in the distinction between the cities of Illusions and Reality in the Forest of Sight:
In a few more steps the forest opened before them, and off to the left a magnificent metropolis appeared. The rooftops shone like mirrors, the walls glistened with thousands of precious stones, and the broad avenues were paved in silver.
"Is that it?" shouted Milo, running toward the shining streets.
"On no, that's only Illusions," said Alec. "The real city is over there" (10.41-43)
What is going on here? Well, Illusions appears to be a city, yes. We learn from Alec that some people live there, but most people live in Reality. Okay, now take away the capital letters, and what do you have? Some people live in illusions, but most live in reality. Get it? That's an allegory. But wait, there's more: Milo thinks that maybe, if he can get Rhyme and Reason (rhyme and reason) to return, Illusions and Reality (illusion and reality) can be matched together and everyone will be on the same page.
Complicated? Yes. Fun? Absolutely.