In most civilized societies, the creation of markets and the rise of trade often brings wares of questionable nature. Often these types of goods are drugs, sacrilegious icons, certain weapons, magical objects, or a diverse number of other items that could be considered either dangerous or unacceptable to a society.
If such wares ever make it into a market where demand is high or noticeable, local authorities tend to create laws that effectively ban the sale of those items; either as a way to protect people from drugs and such, or because certain items are considered legal to only a select few in a given society, and not the general populace.
Merchant organizations supervise what are considered legal and illegal wares, in accordance to local laws. When a ware becomes illegal, its sale will result in certain fines or other punishments, but demand for those wares might still persist. I is at this point that criminal elements start to get involved.
Smugglers discretely transport illegal wares to various trade hubs, where they are to be sold in secret or shady criminal underbellies. It is often that certain illegal (and sometimes legal) wares are sold for a lower price than the general market value, but the quality might be in some way faulty. This is especially true in criminal circles where counterfeiting and other fakery is a focus, and counterfeit coins and items are considered equally illegal by trade laws.
There is also the matter of stolen wares. Most merchants mark their wares and goods with a business crest, and sometimes the more powerful merchant organizations make use of magical markings, which are harder to fake or remove. Thieves and pirates steal wares and try to resell them later; though depending on the markings on the wares, reselling could be difficult in official trade circles.
Criminal fences can be found in most cities where criminal elements are organized, and skilled fencers can even remove magical markings. Fences generally buy stolen goods at a lower price than the market value, and resell later in long increments at a slightly higher price. To many thieves a fence is their only option, as it risky for criminals to try to sell stolen goods on the open market. Local guards and merchant agents are always on the lookout for any potentially illegal or stolen goods.
If one can't sell their illegal wares on the open market, then it's possible to turn to the black markets. Various black markets can be found in almost any city or trade hub in the world, where they are often controlled by larger criminal organizations. Black markets are secret, underground marketplaces that are typically hidden from local law enforcement, or kept alive thanks to bribery and other corruption.
Black markets give access to a diverse amount of different dangerous, illegal, and sometimes fake wares. Typically wares found in a black market are wares that one couldn't easily obtain on any open, legal markets, and it's also possible to find various rare items; like artifacts, magical reagents, experimental devices, exotic pets, slaves, and more.
Prices also tend to be higher in the black market for general goods, and there are no official trade laws or standardized trade systems in a black market; save for the rules made by local criminal gangs and organizations. It is also much more dangerous for an individual to conduct trade in a black market, since there are usually no law enforcers to protect them or their wares, and any disagreements on price or quality could easily evolve into fights or murder.
There are several well known black markets in the world, but the largest is found in Arganorh; known as the Undermarket. It is set up and controlled by the Underthieves, who are an expansive criminal organization consisting of several gangs and sub-divisions. They own several hideouts throughout Arganorh, and some can be found on other continents.
The Undermarket is not one specific marketplace, nor is it always in one definitive place. Its various marketeers and caravans move between Arganorhian cities, often by utilizing the abandoned tunnels of the dwarven Underhalls. As it moves through the Underhalls, it might encounter various dangers like wild goblins, hostile gangs, or other dangers in the darkness, and so the Underthieves must provide protection as the caravans travel.
Law enforcers of various nations in Arganorh have long tried to shut down the Undermarket, but if one is taken down, a new one appears in its place not long after. It isn't generally difficult to find the Undermarket, depending on who one asks, but endeavors intended to destroy its entire existence either lead to disappointment, failure, or death. The combined craftiness and dedication of organized thieves and traders is not to be easily underestimated.