From the Super Mario Wiki
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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 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.