The "Satellite Town" Labyrinth City is a small town established around the entrance to Ramiris' Labyrinth. It was built as a tourist attraction and a business model for those daring enough to challenge their newly made labyrinth.
Originally Labyrinth City referred to the 95th floor of the Labyrinth where the Treants and Dryads resided, which was created to safeguard them from the dangers of the outside world. Since they were a community who revered the Fairy Queen Ramiris as their guardian deity, it was a win-win situation.
Soon after, Rimuru rescued a bunch of Elf slaves who were residents of the Jura Forest and placed them to work in this floor to protect them. Since demi-humans such as Elves fell into a gray area when it came to abduction and slavery, it was dangerous for them to stay outside as they used to.
Finally, as the popularity of the labyrinth grew, a small town was erected around the entrance for ease of access, tourism and a place to relax from it. Thus, this entire area came to be known as Labyrinth City.