From the Super Mario Wiki, the Mario encyclopedia
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Dome City is a location in the Super Mario World television series. It is the home of Oogtar the cave boy. Like the map screen for Yoshi's Island, it is a cluster of domes, many of which are buildings. The domes appear to be based off of the spotted stacks seen in the background of several levels of Super Mario World, such as Yoshi's Island 1.
The domes come in all shapes, colors, and sizes. Mario's house has a moat and windows, as seen in the image on the right. The palm trees are notably similar in the style of the Forest of Illusion's trees, having jack-o'-lantern-like faces.