Gaolgate and the History of Dreadhold

Two thousand years ago, Karrn the Conqueror founded a prison colony on an island he called Blackrock. He used it as a place of exile but did not build a true prison. The dissidents and criminals stranded on the island lived in a small thorp that has since evolved into the village of Gaolgate. Over the years, a few of the later kings of Karnnath made use of the island, but it was largely ignored. As the Lhazaar Princes spread out across the region, the people of Blackrock were either taken as slaves or became subjects of the princes, and eventually the island fell empty again.
  Centuries passed before Blackrock came back into the public eye. King Galifar l was more of a diplomat than his ancestor, Karrn the Conqueror, and even as he fought his war of conquest he realized he would need a place to hold hostages and political prisoners-people too important to kill but too dangerous to be kept close at hand. During his wars in the Ironroot Mountains, Gali.far encountered the dwarves of Clan Kundarak and saw their skills with traps and fortifications. Soon after, he recruited a band of Kundarak dwarves to build his prison and assist in securing it. Within a century, Clan Kundarak had become House Kundarak. Backed by the power of the other dragonmarked houses, the Kundarak barons convinced Galifar I's weaker-willed grandson to cede the fortress to the dwarves who built it. The renamed island of Dreadhold became part of the territory of House Kundarak, for as long as they continued to serve the Kingdom of Galifar.
  This arrangement continued for almost eight hundred years. With each passing century, the dwarves expanded the prison, adding new levels and new warding spells. Architects added vaults to the fortress and magical workshops where artificers and wizards could work on secretive projects of the house. Today, Dreadhold is an important enclave of House Kundarak, second only to the capital city of Korunda Gate.
  In 896 YK, the Kingdom of Galifar collapsed into civil war. It soon became clear there would be no swift end to this conflict. In 900 YK, the Lord Warden of Dreadhold, Zaxon d'Kundarak, contacted the leaders of the land. The rules under which the prison had run were a contract between Galifar and House Kundarak, but Galifar was no more. Dreadhold would continue to serve as a prison, but it would thereafter be an independent operation. Any legitimate authority could send criminals to Dreadhold, provided they paid for the stay.
Gaolgate is a garrison town. Every building supports the prison in some way, from the massive smithy to the small brewery. A fleet of fishing boats brings in food for the villagers and the prison, as the waters around the island teem with fish. Gaolgate is not designed with the comfort of travelers in mind, but there is one large inn-The Gallows-which caters to the crews of support ships and prison transports. Most of the inhabitants of the island are Kundarak dwarves, but there are a few gnomes from House Sivis who manage the message stations of the island. There are also a handful of others, mostly being former prisoners who chose to remain on the island after serving their sentences.
While most of the guards of the prison live in the garrison town of Gaolgate, other island residents spend most of their time in town and are only called to the prison when their skills are needed or when working on a specific project. The inhabitants of Gaolgate have two things in common: Most are highly skilled in a specific trade or craft, assuring everyone has something to contribute to the community, and the vast majority are trained (or combat, ready to grab a waraxe and join the fray should the island fall under attack or a prison break occur.