Loko is a region located in Uberwald, the main geographical feature of which is a massive ring of mountains that surrounds a very deep valley. It was said to contain all sorts of curiously shaped magical creatures like Centaurs and Fauns. This region may also be home to some of the last surviving Orcs on the Disc, according to Unseen Academicals.
Stanmer Crustley led an expedition to Loko. While he successfully recovered ancient scrolls from the caves and brought them back to Ankh-Morpork, he died of planets soon after. In fact, everyone on the expedition and anyone else who visited Loko contracted a strange magical disease. As a result, people began to believe this place was cursed, but the truth is that it has an extreme amount of magical fallout and very, very strong background magic.
Evidently, this is a result of a previous attempt to split the thaum (as instructions for doing so were found on the scrolls discovered by Crustley). Ancient wizards attempted it, and when the reactor began to overload, they attempted to turn it off. Ponder Stibbons theorizes that this attempt is why Loko currently consists of a massive ring of mountains surrounding a very deep valley. Therefore, when Stibbons' own reactor begins to overload in The Science of Discworld, the wizards channel the magic into creating a new universe instead.
Loko is also evidently the origin of Stygium, according to Lord Vetinari in Making Money. That may expain much about the strange properties of that magical metal. In A Hat Full of Sky the wizard Sensibility Bustle used instruction from one of the Loko scrolls to build a device to attract and trap a Hiver. The result was only partly successful, highly dangerous and very messily fatal for several wizards.
It has been suggested that Loko is the birthplace of the Orcs, and the refuge of the last surviving members of the race.