It is unknown how the underground was formed, but it was presumably formed by The Shadow. Torn, one of its main leaders, was a former Krimzon Guardsman, and other members may have previously been part of the Guard.
When Jak and Daxter escaped the Krimzon Guard Fortress, Kor directed them to The Shadow, and the Underground hideout, but when they got there, Torn met them. He didn't want to do business, but after they retrieved a banner from Dead Town, they were in. Jak worked for the Underground throughout the game, in their fight against the Krimzon Guard, as well as the Metal Heads.
The Underground is the forerunner of the Freedom League, which appeared in Jak 3, as the Underground eventually overthrew the regime of Baron Praxis, leading to the Freedom League takeover. Also, leaders and several important members of the Underground gained important positions in the Freedom League after said overthrow.
Besides from Torn, Tess and a few Underground soldiers, there were no members of the Underground really seen, so definable characteristics are unknown.
The Underground hideout is located in a small bunker hidden beneath the city wall where Torn, Tess, Kor, and the rest of the Underground plotted their actions against the Baron. Despite the fact that the entrance is clearly marked by the symbol of the Underground, it was only attacked by the Krimzon Guard once, when they sent Blast Bots to destroy the hideout. (Presumably, the marking was a game caveat, to make it easier for the player to find the entrance. Story-wise the marking is never mentioned.) The hideout is now presumably abandoned or remodeled, since the Underground was disbanded or merged into the Freedom League and the slums were renovated into New Haven.
The Underground doesn't have any specific military. It is presumed they use guerrilla warfare tactics, based around destabilizing, rather than conquering, their opposition.
- The poster of Baron Praxis, that is on the wall in the Underground, has a large red X on it. A poster of Erol has Instructions to kill him if at all possible written on it.
- The Underground had some ties to Krew, who was probably serving as their arms dealer.