The Funhouse is the realm between, an unstable pocket dimension slowly coalescing out of the ether in between all other realms of existence. It is a patchwork of different realms, regions, or area, all of which take characteristics of their nature from some other plane or another, and present them twisted just a little bit. One might even call these irregular slices of geography...reflections. And that is what the Funhouse is, a conglomeration of reflections, uneven shards of glass that have managed to be mostly fit back together, each of which reflects a different possible universe somewhere out in the multiverse.
It is the other to all of the everies out there: to a mundane world, without any magic or fantasy, it is Narnia through the wardrobe and what Alice finds on the other side of her looking glass. To the natives of those try realms of high fantasy however, where whimsy and magic are found in every breath drawn and every dewdrop seen, these reflections seem positively mundane in their predictability. It burns any visitor from a reality of endless glaciers, and chills to the bone those immigrants from the pits of flame.
And that's why it is so much fun. And so very terrifying.