The Netherworld is a location in the World.
According to Gnarl, the Netherworld was the place from which the very first Minion emerged and crawled up to the surface in order to serve the very first of the Overlords.
Sometime after the Third Overlord was trapped in the Infernal Abyss, and shortly before the Dark Tower was destroyed in the Great Cataclysm, the Minions undertook an Exodus in order to find a new home to lie in wait for the emergence of a new master to make Overlord. However, only the Brown Minions and their Hive managed to make it to the safety of the Netherworld as the Reds, Greens, and Blues and their respective Hives were drawn away for various reasons. In the years after, Gnarl consolidated what Minions were still around including Mortis, an ancient Blue Minion that had the power to resurrect fallen Minions, but still required the direction of an Overlord.
After an undisclosed amonut of time, somehow the Minions found out about the existence and location of the Third Overlord's son in Nordberg. They were able to rescue him from an onslaught by the growing forces of the Glorious Empire, and brought him to the Netherworld to solidy his growth and development into his role as the Fourth Overlord from the relative safety of the Netherworld Tower.