Underland (not to be confused with the Deep Realm) was the name for all the land under the surface of the World of Narnia (though chiefly only the most inhabitable areas). The top was called the Marches and below it lay a layer of solid earth. Directly beneath the Ruined City of the Giants, however, the earth opened up into a large cave called the Deep Realm and then the the cavern of Father Time. Even further below the solid region, hundreds of feet under Ettinsmoor and the Wild Lands of the North, was a colossal, nation-sized cavern called the "Shallow Lands" because of how largely open the space was. Most of the Shadow Lands supported an underground lake known as the "Sunless Sea," though some sections were dry land, including the southern-most region where the Lady of the Green Kirtle had a palace built for herself. She became the unofficial "queen" of Underland, magically enslaving the inhabiting Earthmen who came from the nation of Bism (lying another six thousand feet below), the land of molten rock.
All outlets from Underland to the Overworld lay across the Sunless Sea (except for the tunnel dug by the Earthmen under the spell of the Lady of the Green Kirtle). After the Lady of the Green Kirtle was slain and the curse-freed Earthmen returned to Bism, almost all of the Shallow Lands flooded as a reaction to the broken curse and the queen's death. However, since the other tunnel was conected to Narnia, south of the northern Marshlands, the water receded slightly, and the Sunless Sea was added to the Narnian Empire in which it was the lowest point in the empire's altitude.
However when the world had ended, it had completely flooded and became solid ice, in which Father Time along with the cavern creatures awoke and helped destroy the world.