From the Super Mario Wiki
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At entrance of the Gulch lies a village where the Boo's live, at the base of the gulch is the Windy Mill, while at the cliff on the east side of the gulch lies the immense castle owned by Tubba Blubba.
In the game, when Mario talks to a few Boos, Tubba Blubba comes along and eats one named Stanley. Unfortunately, he was just the latest in a long line of tasty ghost treats. The gulch is similar to Twilight Trail in Paper Mario: The Thousand-Year Door, and Tubba Blubba greatly resembles Macho Grubba from the Glitz Pit.
It is revealed that the Boos actually live in the abandoned village, and that they did not build the town.
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