The Kingdom of Lustburg is a country governed through Matriarchy (a system that automatically places women in positions of power, and superiority to men), which leads to plenty of inner conflict. It is also a location where the population is also naturally proficient in magic.
It is located Northeast of Northern Pride and North of Greed Dike
See its exact location below:
Many important Units hail from Lustburg, including the protagonist of Part 1, Chapter 3: Lisbeth. Lustburg is also the primary location of the Chapter's events.
For the complete list of Units associated prominently with Lustburg, see here