Caras Galadhon was in the Naith of Lórien, in the heart of the Silvan Elven realm. It was built in the middle of, on top of, and out of the Mallorn trees that Galadriel had brought with her from Valinor, and was the residence of Celeborn and Galadriel.
In the First Edition of The Lord of the Rings, Caras Galadhon was spelled as Caras Galadon.
Caras Galadon is circular in shape and about three-thousand feet from east to west and was surrounded by a wall of green earth and a ditch or a moat called the Deep Fosse. On the western border, a long stone road outside the Deep Fosse ran for many dozens of miles also surrounded the city. The only entrance was in the south through a set of Great Gates across a bridge in the Deep Fosse.
The city was a host Mallorn trees where the elves lived in flets a top the trees. Located in the cities' center, atop the largest Mallorn in the city, was the flet of Celeborn and Galadriel and the Chamber of Celeborn.
Other notable features were Galadriel’s garden and her mirror both in the southeast quarter.
The building of the city was probably started by the Silvan speaking Nandor elves who first settled the forest area of Lórien during the Time of the Trees under the light of stars, and was no doubt completed and/or added to throughout the ages by the city's later Sindarin lords. No doubt beautiful during the days of Amdír and his son Amroth, it was their successors' Celeborn and his wife Galadriel that made the city into a blissful but rather isolated Elven haven.
During the events of the War of the Ring, the Fellowship of the Ring was brought through Lórien to Caras Galadhon, and there met the lords of the Galadhrim. Around the time of the siege of Minas Tirith Lorien was besieged itself by Dol Guldur, three times.
During the Fourth Age, after Galadriel had left Lórien, Caras Galadhon was ruled by a lonely Celeborn as capital of a Lórien which now spanned both sides of the river Anduin, but at some point during the age he left for Valinor as well, and Caras Galadhon slowly became depopulated. It is unclear just how this came about since most of Lórien's people were Silvan Elves and, presumably, not necessarily inclined to leave Middle-Earth so soon after Sauron's fall; there are different references to the Fate of the Elves of Middle-Earth scattered throughout Tolkien's published works. Caras Galadhon is called a "great city" in the Lord of the Rings, and the impression is that its population numbered in the thousands. However, the "Tale of Aragorn and Arwen" in Appendix A depicts Caras Galadhon as wholly abandoned by the time of Aragorn II Elessar's death.
The name Caras Galadhon means 'Fortress of Galadhon' in Sindarin.