A very long time ago the zone was once two seperate forests known seperately as the Deep Woods and Shrouded Forest. However as time went by the seperate woods and the forest grew together as one forest and in modern times became a zone simply known as the Forest Zone. The settlements located in these forests (that you can run by in Sonic and the Black Knight) have also come together to form the Town Stage.
One of the major towns around Forest Zone thats been around since ancient times. Like it's predecessor settlements, most of the homes are built on platforms up on support beams and made around the large trees. Some bigger than others, some of better quality than others. The Town stage is not named yet, but it was home to Mystic Monkey and his mother.
Throughout time it has natual terrain structures which classify it as a zone such as the ground or tree's forming loop-de-loops or grindable vines. This could be due to two seperate parts of the forest merging as one.
Originally it was going to be Jungle Zone as Mystic's location of origin (plus the fact the best place to find a monkey is in a jungle), but as user:Mystic Monkey wanted to go with a more British theme he chose to have Mystic's origin around a modern version of Grand Kingdom but with zones. Grand Kingdom's Forest Zone is simular to South Island's Jungle Zone, thus why the zone was named after the noun.