The entire world is made out of yarn and buttons, along with its residents, buildings, and everything else. Even the surface of the water is made out of yarn. The world consists of seven parts, and all of these parts have seperated. This is because of the evil acts of Yin-Yarn, and is why Kirby has to go on the adventure in the first place. Kirby sets out on his adventure with the goal of finding all the pieces of Magic Yarn, which is what sews all the parts of the world back together. One of these pieces is placed in each area, and once every area is completed, Patch Land is fixed.
Since everything and everbody is made out of yarn and buttons, some things need to be done a little differently. Kirby can transform into a few different things, and these transformations make things even more weird. Kirby cannot suck things up in this world like he used to be able to, and instead has a yarn whip that grabs things. This whip is how he gets rid of enemies, swings on buttons, and finishes each level.
This world seems to be quite similar to Dream Land, having the same kind of build and shape. It has civilized inhabitant with cities, rulers, and shops. Water is plentiful, along with green grass. There is an area of the world with hot volcanoes and lava, and another area with ice and snow. Obviously, there is much variation between the lands in terrain and weather.