The Krater official site describes the world as follows:
Krater, A Brief IntroductionEdit
The crater is located in the Great Northern Wasteland, a barren desert poisoned by nightmarish weapons during the Untergang. In the middle of the toxic wasteland, against all odds, there is a huge crater with mysteriously fertile soil.
The first Settlers to arrive were a wretched and starving lot, forced from their lands by marauding bandit clans. The Settlers were desperate and had to take their chances by crossing the wasteland (suicidal in most regards) and could not believe their luck when they stumbled upon a fecund valley complete with precious sweet-water lakes.
The crater was seen as a gift from divine powers, and the Settlers would if needed, defend it to the last man. Never again would they be forced to abandon their lands. However, the settlers did not turn isolationist and welcomed newcomers into their fold. Strength in numbers was needed and resources were plenty, resulting in a steady population growth. Krater City was born.