Southern Arun lies at the heart of the Valkyon Federation, below the Great Rift that bisects Arun in two. "The great human city of Velika is the jewel of Southern Arun. Built by humans in collaboration with the goddess Velik, the city is the capital of the Federation and the nexus of trade and diplomacy, as well as being the center of the struggle for Southern Arun. The landscape is dominated by the Great Machine, which not only powers the city but helps protect it," proclaims the update.
You can read more about TERA's lore at the official site.