It is a large lake, situated deep in the forest. Its water is very clear and clean, and it has a small island in the middle with nothing on it but a very old tree - "the oldest one in the forest."
Birds are not allowed on the lake, by Nimue's rules.
In Beyond the Kingdoms, Alex, Mother Goose and Lester travel into the story of King Arthur by mistake - they are tricked into it by the Masked Man, and think they are in the fairy-tale world at first.
To get back to the Land of Stories, Alex needs to make the Portal Potion, and one ingredient is a part of the tree. When Alex and Arthur want to collect a part of the old tree on the island in the middle of the lake, Nimue is pleased at first, saying she doesn't get visitors very often. When she finds out they are on friendly terms with Merlin, she loses her cool and traps them to lure Merlin to her.
Nimue treatens to harm Alex and Arthur unless Merlin comes back to her. When he grudingly agrees in order to save them, Nimue fails to keep up her part of the deal and tries to harm them anyway. Mother Goose steps in and evaporates the entire lake.