Waterdeep, also known as the City of Splendors or the Crown of the North, was the most important and influential city in the North and perhaps in all Faerûn. For this reason it was considered part of the Western Heartlands of the Realms, even though it lay 150 miles north of Daggerford on the shores of the Sword Coast. The city sat “slightly above the 45 degree north latitude line on Toril.” The road to Waterdeep was well paved and well patrolled. The city was the hub of trading from the mineral-rich lands to the north, the merchant kingdoms of Amn and Calimshan to the south, the kingdoms of the Inner Sea to the east, and the sea kingdoms and traders to the west. Waterdeep’s authority extended between thirty to forty miles from its walls.The surrounding region had a population density of over 200 people per square mile.
Waterdeep was named for its outstanding natural deep-water harbor, and the city that grew up at this site became the commercial crossroads of the northern Realms. More than 100,000 people made their home in Waterdeep. The city sprawled northward from the sea, spreading along the flanks of Mount Waterdeep, which used to be home to the Melairkyn, a mithral-mining dwarven clan, and the entire length and great depth of the mountain was riddled with passages and tunnels, most of which were occupied by deadly creatures whose presence in the mountain predated the founding of the city itself. The halls of Undermountain located beneath the city were a popular target for adventurers, who enjoyed the close vicinity of the city’s main taverns and temples where aid could be purchased through donations.
After the Spellplague, it lost its title as Faerûn’s most important and influential city to Baldur’s Gate. Baldur’s Gate grew not only larger than Waterdeep in population but also doubled its area.
Waterdeep was built on the site of the ancient elven settlement of Aelinthaldaar, which gave way to a farming community of humans that developed into Bloodhand Hold. This was conquered and renamed Nimoar’s Hold before the name “Waterdeep” caught on. Waterdeep was the most common name used by the sea captains docking at the port to trade.
Waterdeep was used as a trading site for trade activities between northern tribesmen and southern merchants from −1088 DR onwards. By 52 DR, permanent farms had sprung up in the area. The name “Waterdeep” (not as a city, but as a town) was used by the ship captains docking to trade at the port, and it was slowly adopted into common use. The city was truly established by 1032 DR, the year Ahghairon became the first Lord of Waterdeep, and the date from which Northreckoning is counted.
The city grew spectacularly, such that by 1248 DR both the City of the Dead and the guilds had been developed. The guild masters seized control soon afterwards, ushering in a period of unrest and bitter conflict known as the Guildwars. The Guildwars ended only when the two surviving guild masters brought in their own period of misrule. It was only in 1273 DR that the modern system of government was instituted. This was the year that the Magisters were established and the secret Lords of Waterdeep were firmly reestablished. Since that time, the city continued to grow and prosper.
Humankind and other races came from all over the Realms to earn hard coin in the City of Splendors. Over the years, these successful merchants set up guilds and themselves became nobility, supporting the secretive Lords of Waterdeep who policed the city fairly, yet with a light hand, by means of the superb City Guard (soldiers), City Watch (police) and over 20 black-robed magistrates. As a result, Waterdeep was a place tolerant of different races, religions, and lifestyles. This in turn encouraged commerce and Waterdeep grew into a huge, eclectic city.