Approximate size: Lost woods has a population of 1500 people.
Traveler’s Guide: Some people believe the forest surrounding the Lost Woods settlement has a mind of its own, but for the inhabitants of the town, this theory is a known fact. The forest has a mind of its own, and long ago the citizens of Lost Woods struck a bargain with the spirits of the forest: As long as the woods protects them, they will give back to the forest. Thus, the forest rearranges itself to prevent travelers from entering Lost Woods. Many seek out the village, for it is said they house great secrets and treasure there, but few have ever managed to outsmart the woods and see the settlement for themselves.
Layout: With an ever-shifting forest around them, it is hard to get an exact layout on the town. However, it is known that it does not have any walls or fortifications. In fact, it is said that the town is made entirely out of old wood, rock, or anything else that will not cause harm to the forest. There are no shops, only small houses and a central meeting hall.
The stories of lost or hidden villages deep within forests is an old and popular tale. The Lost Woods is just one concept on how these places stay hidden for so long so that only the most worthy of adventurers are able to find it.
As your party sets out to search for the Lost Woods settlement, be it for treasure, information, or any other reasons for adventure, be sure to carefully describe areas of the forest to them in stark detail. After a few days of wandering the woods, begin to describe those same areas, though not always in the same order. Let them decide for themselves if they are going in circles, if the forest is trying to steer them out or get them lost within.
Finally, have a few ideas for how they could find the Lost Woods, but be open to their antics as well. A few suggestions could be harming the forest to invoke the wrath of the spirits or the town set to protect it. You could use whatever tactics you feel best represent nature spirits in your world.
Once the party gets to the settlement, it is very natural and does not do anything to invoke anger from the forest. These people take only what they need, they mend and tend the forest and in return the woods protect them by steering travelers away.
I am a huge fan of survival-type sessions in games. Therefore, let the woods surrounding the Lost Woods settlement really test your players. Let their provisions run low, game be scarce, and let them get desperate to get out of the woods. However you wish to represent the Lost Woods settlement, it can be a fun challenge for a group of players trying to survive in an unfriendly area.