Dead Town is a location in Jak II. It primarily consists of leftover ruins outside Haven City's walls, filled with mud, rubble and hostile creatures. It is the Haven-era equivalent of where once lay Sandover Village but was destroyed in an assault by the Metal Heads and subsequently abandoned by order of the city's ruler Baron Praxis.
The section of the city was destroyed during a battle where Metal Heads broke through the City Walls and moved towards the Sacred Site. In response, Baron Praxis sealed the area off from the city, leaving anyone who had not already evacuated for dead. The Shadow stayed behind and through unknown means managed to stop the assault.
Upon first meeting Torn, Jak and Daxter receive a mission to steal Baron Praxis' banner from the top of the ruined temple in Dead Town in order to prove themselves worthy to join the Underground. After some initial difficulties, including glubs, znorkle tooth and crumbling platforms, they manage to retrieve the banner and ruin the tower in the same process. There is a humorous reference here in that Jak and Daxter attempt a victory "dance", similar to the dances they perform after obtaining a Power Cell in Jak and Daxter: The Precursor Legacy, after grabbing the Baron's flag, but the tower begins to collapse, thus interrupting the victory.
Later, when Torn receives a report of creatures moving towards the Sacred Site for a second time, he sends Jak and Daxter on a mission to stop the creatures. After fighting their way through many Metal Heads, they arrive at the Sacred Site. To their surprise, the Sacred Site is Samos' hut, which leads them to the important realization that Dead Town is their past home.
Jak and Daxter are once more sent to Dead Town by Samos in order to retrieve the Life Seed, which is required for the younger Samos so that he can truly awaken as a Sage and ask the plants in Haven Forest vital questions about their future. They use the Titan Suit to get to Samos' hut, where they find the Life Seed.
Dead Town is no longer accessible by the time of Jak 3 due to the construction of New Haven. When the Haven City maps of Jak II and 3 are compared, the entrance to the Sewers in New Haven to the northeast has replaced the entrance to Dead Town. The area is, however, visible from the KG War Factory, and it appears much the same except for the fact that the water is somewhat cleaner.
Dead Town is effectively the ruins of a small civilization, the result of Baron Praxis abandoning it and rebuilding the city's walls further back. By the time Jak first enters the site, near the beginning of the game, it is in ruins and consists mainly of decaying buildings, harmful mud, and overgrowing weeds such as bulrushes. It is not explicitly stated where this mud came from, but is possibly waste from the city. The site, being outside the city's walls, is home to Metal Heads among other dangerous creatures. If you look carefully at the ends of the entire area, you'll notice the remains of the old Shield Wall with holes and sections missing while some parts of it connects to the new wall.