The Dreamworld is a meta-plane, an annex of the Material, that is both a realm in and of itself and in a constant state of creation by the dreamers from all parts of the The Etherium. It is a limited physical realm, having its own set of natural laws that are similar to those of the Material plane to which it is bound, but with a higher degree of flexibility. It is populated by dream constructs - aeons that have been dreamed and given form as their dreamers push further into the part of the Dreamworld that exists extrinsic from the waking world. It is governed and maintained by the dreamlords, whose enforcers are the Riders of Dream.
There are many stories stories about the creation of the Dreamworld. The most popular goes as follows: In the days before Heaven, the Old Gods sought to create a paradise to which the could escape when harried by their enemies from the Outside. They build the Dreamworld just as their power was waning, and they peopled it with ancient guardians and preparers of their way upon their first arriving. But before the Old Gods could set foot in their paradise, they were eradicated by Outsiders, who then created the Material and Celestial planes for their own twisted reasons. The Dreamworld they bound to the Material, thus diminishing it in mockery of its betrayed founders. There are ruins and monuments throughout the Dreamworld that have no clear purpose. These are seen as signs of the civilization that never came to be. The guardians are said to have mated with figments - creatures made entirely of dream and generated by the minds of sleepers - to create the race of dreamwalkers. From them, the first dreamlords arose to bring order and to shape the Dreamworld into what it is today.
Most of the Dreamworld can be shaped at will by dreamers or by sufficiently powerful dreamwalkers. There are a few parts that can never be changed or can only be changed in limited ways. Most of these are tied to the strange energy of the forgotten structures said to have been left by the Old Gods. Certain dreamers tend to dream in the same ways, or to dream about the same things. Thus, that large part of the Dream that is in constant flux as it is being continually created by sleepers tends to be broken up into loose regions. The dreams of demons are dark and are usually bent on topics such a torture, murders, and other unsavory things. Thus, the land wherein demons dream is cursed and haunted and black. Angels are lucid dreamers, however, and contribute the least to the Dreamworld's ongoing creation because they tend to stay near the Silver Gates, the portal through which all dreamers enter the Dreamworld. Many figments are dreamed once and then never appear again. Only the ones that are dreamed of again and again by a dreamer who continually presses further into Dream - beyond the Lands of Creation and into the Dreamworld proper - become sentient and separate from the dreamer's mind.