Dungeons are the intricate network of halls, and lanes, and tunnels, alleys, cellars, mansions and passages that lie beneath a Keep in a Town. They occasionally have connections with the sewers and also rarely have tombs, though the latter tend to only rarely have mummies and more often function as a mass grave for the town's inhabitants.
 Composition of Dungeons
Inside of a dungeon one will find many hostiles and quest objectives as well as a good deal of treasure, often in the form of coin, weaponry and armor. There are often Bosses inside of a dungeon, and when you encounter them they will announce themselves as such.
 Possible Bugs
Currently an explorer may encounter trap-doors that do not work. This may be a bug.
If you get a quest that points you to a location in or near a town which does not seem to be related to the quest, then you may actually need to go into the dungeon. Sometimes, in the description of a quest you may be advised to look under the keep first.