Castle Oblivion

Castle Oblivion (忘却の城 Bōkyaku no Shiro) is the setting of Kingdom Hearts: Chain of Memories, and the only world in the game which the characters actually visit. It is controlled by Marluxia of Organization XIII, and consists of thirteen floors above ground, and twelve basements, creating a total of 25 floors.

Organization Headquarters
The origins of Castle Oblivion and its use prior to the series are still unknown other than it exists in a dimension in between light and darkness, similar to Twilight Town. However, it was eventually found by Xemnas, Superior of Organization XIII, who decided to convert it to a base of operations for the Organization. The fortress soon became a base where research and experiments would be performed on memories. Since the members of Organization XIII lack emotions, they needed to rely on memories to piece together their characterizations.

Xemnas sent Xigbar and Xaldin to recruit more members, as they needed a good number in order to run the fortress. Eventually, a girl named Naminé appeared in this castle and was found by the Organization. They soon learned of her strange abilities over memories and she became the core of the research. To further help, Xemnas had pods created that could piece together memories to aid in the research. The castle and Naminé were eventually entrusted to Marluxia, a new member. However, Marluxia would use this grant in power in a plot to seize control over the Organization. Another rule in this castle is the continued usage of cards.

A Separate Motive
While Xemnas did want to experiment on memories in the Castle, it is largely hinted that he had a separate motive. This motive was brought up in a conversation between Xigbar and Zexion at the Castle that Never Was. Xigbar believes that Xemnas is searching for a room called the Room of Awakening and believes that Xemnas thinks it’s somewhere in Castle Oblivion. This could mean that Castle Oblivion will show up in a later game. Xemnas, when he was known as Xehanort, constructed a Room called the Room of Sleep that houses armor that Xemnas refers to as “Friend”. The Room of Awakening was not made by Xehanort, but does appear to exist and may house another friend. Xemnas’s plans for this room are unknown.

Kingdom Hearts: Chain of Memories
Sora, Donald, and Goofy follow Pluto into Castle Oblivion. As soon as they enter, they forget all their skills, and are forced to use the castle's memory-based card combat system. The higher they progress up the Castle, the more memories are reshaped by Naminé. This is so that Marluxia and Larxene can use Sora as a puppet to overthrow Xemnas. The scheme fails thanks to Axel, and Marluxia and Larxene are killed.

Reverse/Rebirth Mode
Riku awakens inside the lowest basement of Castle Oblivion, as a result of his connection to Sora. Here he faces his memories of both Xehanort's Heartless and Maleficent, and overcoming his fear of the darkness within himself. It was within the Castle that he meets DiZ and Naminé, as well as reuniting with King Mickey.

The Floors and the Basements
Castle Oblivion is divided into two equal sections, the floors and the basements. Marluxia, Axel and Larxene control the floors. Vexen, Lexaeus and Zexion control the basements. In the manga, it appears that the floors and basements members have a rivalry against each other. Also, in the manga it appears as if Zexion is the leader of the basements group, and that Lexaeus is his second in command, leaving Vexen to be a scientist who simply goes from the floors to the basements performing his experiments.

Trivia

 * Interesting to note is that in Re:Chain of Memories, a Key to Rewards room is added to the Castle Oblivion world on the 13th Floor. What lies in this room is the Superglide ability. If Reverse/Rebirth mode is completed (or Kingdom Hearts II: Final Mix+ is completed while playing the Japanese version of Re:Chain of Memories), a Star Seeker keyblade card is accessed.
 * Castle Oblivion appears in Kingdom Hearts 358/2 Days and it is unknown if a card system will be used when visiting that world.
 * In addition to the above statement, the creation and reasoning behind the card system is unknown. It is possible that it was made by the Organization to slightly impair Riku and Sora as an attempt to make them easier to manipulate, or as a form of defence for their hideout, as any invader would be unskilled and as such easy to eliminate. Throughout during Sora's tutorial, Marluxia's vague explanation implied that the cards were simply part of the castle. Furthermore, this could be a lie since Marluxia also said that the memory loss was part of the castle as well, when in actuality, it was Naminé. While many theories could be created, nothing official has been stated and could possibly be explained in 358/2 Days.