Underground Realm of the Gnomes

From King's Quest Omnipedia

The Realm of the Gnomes is north of the Swamp and lies in the tunnels under the mountains. The gnomes were mostly miners and traders. During the cataclysm they were sealed in their underground world. Connor met several gnomes working to establish an exit topside. It is said that millenia ago there was a large civilization that lived in the underground world, but no one had ever found proof of this, except Connor. This kingdom is also known as the Land of the Gnomes by its inhabitants.

It is likely that the mountains mentioned are part of the Great Mountains that separate the continent of Serenia into 3 main areas.