Destiny Island is a magical isle floating in a sea Between Worlds. It's part of a chain, and some remember that there used to be a town on one of the larger islands. Some say it's still there, if you know how to find it. If one can find Destiny Island, then one generally finds the smallest of the island chain.
This is the island where Sora, Riku, and others gathered as children, a haven between the worlds, and a small treetop village, where the residents who remain can live. There's a tall watchtower over the island, and a secret cave offers a place to hide away from it all.
Interestingly, a close inspection of the place may lead one to conclude that it was never intended to be a village at all, more of an expansive tree house where children could play... but as the children grew up, so did their play area. Now, it's a village. But then, on a magical island, is that really so strange?
Groups
Destiny Island is sometimes used as a haven by the Keyblade Masters, though they more often operate out of the Castle of Delights.