From the Super Mario Wiki, the Mario encyclopedia
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Moleville is a town in Super Mario RPG: Legend of the Seven Stars where several moles live. The houses in the town seem to be modeled after tents, and the town is mostly subterranean. Among the shop services in the town, there are also many local vendors, selling items such as fireworks, along with the treasure-hunting Toad that is willing to sell his inventory at the shop. There is also a hidden warp to Midas River here, accessible by giving a mole girl standing on a bucket a Carbo Cookie. She then hops off the bucket, giving Mario a warp to Midas River.
When Mario, Mallow, and Geno first discover the village, two mole children are lost in the Coal Mines, and Mario's party decide to help the lost youngsters. Along the way, they not only save the children and defeat Punchinello, but they also recover a Star Piece.
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