In my Pathfinder RPG campaign setting I have two continents separated by an isthmus. An artificial canyon carved through the isthmus from one ocean to another divides the continents. The canyon is five miles wide for the most part, but narrows at The Pinch to a spot one mile wide with a narrow bridge.
The canyon separates the eastern and western continents. It was carved out years ago by wizards, who placed a mountain at the north end of the canyon and a Wall of Force down the south end. These prevent the ocean from filling the canyon.
Between the south end and The Pinch, at the highest point in the canyon but still 2500 feet below sea level, a city has been built against the eastern canyon wall. The city, Blackmount, is the only point on the planet where an elixir that prolongs life may be made. It's also outside the legal jurisdiction of either political state on either side of the canyon.
The part I am stuck on, developing this city, is how they manage water. They're below sea level. How does fresh water get in? What do they do with waste water?
The feel I am going for is Age of Englightment / Pirates of the Carribean (so, roughly 1730 technology level) but in an alternate world where humans compete with elves, dwarves, halfings and gnomes for resources on the planet (and those are just the "good/benign" races). Magic is used by a small percentage of the global population.
EDIT: I agree that I could hand wave away the problems with water and sewage by using the term "magic" and say "The wizards dealt with it." My intent was to find a different way to address it.
With regards to food, trade, and roads: I have not planned this out in enough detail because I got stuck on the water issue. My current idea is that the (small) city is the only place on the planet that makes an elixir that may prolong life. This is sold annually in limited quantities for an exorbitant price. Part of that income is used to bring in food, water and other rare goods on special centaurs that are more mountain-goat than horse, who make their way down incredibly steep channels. Or maybe riders on giant spiders haul cargo up and down. There are no easy roads out, but gravity easily brings all manner of stuff down to the city; this causes its own set of problems.