The place the world of Junkyard takes place in seems to be somewhere in western Wisconsin with its numerous hills and valleys, and the infinite scrap you can find. (there are a lot of people who never take care of their vehicles and they sit and rot)

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The time period of Junkyard appears to be in the near future as the life Johnny is not unsimilar to some of today. But, the major transport facilities (train tracks and roads) are blocked off hinting at a catastrophic event with the outside world which i will discuss.

The reason the roads are blocked off is most likely of a deadly illness, killing ruthlessly. So, the people and travelers in the area put up very redneck looking barricades to prevent the illness from spreading to them. Their efforts worked, mostly, that is. I think the reason you inherit the junkyard is because Bob (the narrator) is slowly dying to the illness described and he is forced to give you the junkyard and teach you the family's ways before he dies.

The Factory, being so close to the border, was shut down due to lack of workers and was left to rot. The 'Factory' also appears to actually be a small power plant, because of the generators in that one room. And, there are enough ducts and pipes everywhere as well as multiple buildings, which, if you know anything about a power plant, they have a lot of those. But I can already hear you asking yourself "How do the people of junkyard get power then?" Here's the answer: the windmills. There are multiple wind turbines in high places on the map, which slowly turn and produce power, so you have power.

Well, according to my explorations of this place it looks more like an extremely small town, that has walls to protect it from the plague, and was renamed when the plague was mostly over. It also has some small industrial areas, that were most likely for dropping off and buying goods.

This massive appears to be the heart of the Junkyard world, and looks like it existed before the plague. Due to its massive size, it was and is probably a place of high interest.

The campground was probably at one point a popular tourist attraction, but it turned into a small community after you know what, but wasn't renamed. The Pawn Shop is the crazy old lady's way of getting all sorts of valuable items, and it appears that there area is full of artifacts and is very rich in history.

The pawnshop items all appear to be very old, except for a select few, like the Einstein figurine.
This age that appears to be on almost every pawnshop item is probably because they were there for a long time, excluding the ones found in containers. Now, about those caskets, the caskets which are very undersized, appear to be for infants, as the plague would kill them soon after birth. This dark theory would explain why you do not see any children in the game.

These place are items owned by your family members (or lack thereof) and you inherit them, except the shredder, which you buy in the tutorial quests.

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This guide is based off gameplay alone, so it may not be entirely accurate.