Markarth Markarth , Markarth Side , Nchuand - Zel , or the City of Stone is one of the nine major cities in Skyrim and the capital of the Eastern Reach Hold . Markarth is unique in Skyrim in that it was originally built by the Dwemer in the Merethic Era . Description . Geography . Markarth is nestled in the Druadach Mountains and is hidden among the mountains in the Reach . Markarth has only one entrance located on the eastern end . Upon entering the town , you are greeted with the marketplace and the local inn . From here is where Markarth splits into three different elevated levels . The lower level has a sizable river and two waterfalls running through it . Places such as Cidhna Mine and the Warrens are located here . These places are where the poor and criminal aspect of Markarth reside and work . The local craftsmen are located here as well as the alchemy shop . The middle level does not have much . It has part of the river going through it as well as a single house . This place directly leads to Understone Keep , the Jarl ' s home and where politics are usually talked about in Markarth . The upper level is where many of the wealthier residents stay as well as the bank , and the Temple of Dibella . Outside the city gates , you can find local farms that surprisingly benefit from the cold ridged mountains in the Reach . The primary resource Markarth produces is Silver Ore which the Cidhna Mine produces . History . First Era . Nchuand - Zel was the name of the Dwemer ruins modern - day Markarth was known as in the past . Oddly enough trees resembling Junipers are found within the city and seem to hold some significance , regardless , the Dwemer vanished out of the blue , and the Falmer eventually took refuge into the ruins as many did in Skyrim . During the Alessian Reforms , Ryain Direnni of the Direnni Hegemony rebelled against the Alessian Empire along with other figures such as Kjoric the White and Rislav Larich . Ryain and his army conquered territories such as Markarth and Elinhir as well as sack Orsinium before the Siege of Orsinium with Daggerfall and Sentinel . In 1E 2801 , Emperor Kastav of the Second Empire used the Dragonguard to capture hostages from the cities of Markarth and Hroldan to ensure that the Jarl s of Skyrim met with the conscription quotas made out by Kastav . The Master of the Dragonguard did not want to comply , but Kastav ignored the issue and had the Dragonguard take them away . Luckily , the hostages were housed with other acolytes of Sky Haven Temple , where the Dragonguard was stationed . Second Era . During the Alliance War , the kingdoms of Western Skyrim ( Falkreath , Morthal , Solitude , and Whiterun ) split from the Kingdoms of Eastern Skyrim ( Dawnstar , Riften , Windhelm , Winterhold ) when controversy over the next High King grew greatly . The Reach , as well as Markarth , was independent of both nations and as a result , neutral in the Alliance War . Markarth was under the leadership of someone known as the Despot of Markarth . The Despot of Markarth was a very cruel and he commanded an army of Reachman . Markarth ' s denizens worshiped Hircine , the Daedric Prince of the Hunt . At one point , the Despot made an allegiance with Mannimarco , the King of Worms and Javad Tharn of the Nibenay . In 2E 578 , Vanus Galerion tracked down Mannimarco in Markarth at the Inner Nchuand - Zel ruins and battled furiously in ruins . Mannimarco escaped , and Galerion rescued an Imperial scribe named Flaccus Terentius . Both Vanus and Flaccus left Markarth and traveled eastward to Windhelm . Third Era . During the Imperial Simulacrum , the Markarth Side township existed in Skyrim in between the towns of Snowhawk and Dragon Bridge . At one point , the Eternal Champion had visited the town on their quest for a piece of the Staff of Chaos to defeat Jagar Tharn at the Imperial Palace . Fourth Era . In 4E 174 , the Third Aldmeri Dominion attacked the Imperial Province of Cyrodiil in the efforts of installing order under the Thalmor . The Dominion besieged many cities across Cyrodiil and left the Imperial City open to attack . The Imperial Legion situated in the Reach had to leave Skyrim to help defend the Imperial Capital from the Elves . This gave the Forsworn Clan of Reachman the opportunity to capture Markarth and to reclaim the Reach under the leadership of Madanach , the King of Rags . The rule under the Forsworn was drastically different than in the second era where the Despot of Markarth oppressed the citizens . In the two years that Madanach was in control , Markarth was a peaceful kingdom and tried to convince the Empire into making the Reach an independent nation separate from Skyrim . Before the Empire was able to make a decision , Ulfric Stormcloak of Windhelm created a militia of Nordic Soldiers and besieged the city of Markarth in an event infamously known as the Markarth Incident . Then Jarl Hrolfdir of Markarth was forced by the Thalmor ( who became involved in Imperial politics after the Great War ) to arrest Ulfric for war crimes . This event was one of the leading causes of the Skyrim Civil War . In 4E 201 , the city of Markarth was under the leadership of Jarl Igmund who , despite Ulfric Stormcloak ' s help in the Markarth Incident , believes firmly in the Mede Empire and that Ulfric ' s arrest was beneficial to Skyrim ' s safety . Around the same time , Ulfric Stormcloak destroys High King Torygg with the power of his Thu ' um and initiated the Skyrim Civil War between the Old Holds and the Imperial Holds in Skyrim . The city of Markarth joined Solitude in its fight against the Old Holds of Skyrim .