The term Khazad is used to refer to a large and (almost) entirely underground settlement. The term originates from ancient Terran literature, the first recorded use in it's modern context was during the pre-enlightenment colonisation of Mars when several settlements included the word 'khazad' in their name. The most well-known example of Tharsis Khazad which survives to this day.

Building underground carries with it many difficulties, such as limited access to sunlight, high construction costs, and the risk of cave-ins. However, it also provides several benifits, such as easy access to raw materials, cheap radiation shielding, insulation, protection and in many cases secrecy. While most khazads include surface structures, some are entirely underground in order to hide their existance from the outside world.

Khazads are most common on worlds in the process of being terraformed, worlds impossible to terraform but rich in some resource the population wishes to be nearby and worlds used by factions trying to hide from others. Worlds with extensive cave systems may also be rich in Khazads.