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What is an Overworld?
The original Zelda consisted of 2 properties, an Overworld and Dungeons. An Overworld is simply the "outside" area of a quest. Overworlds are meant to be used to access the Dungeons, along with a good place to set up shops and other things that aid the quest.
The term "Overworld" has many meanings in Zelda Classic. It can be just the outside area between the dungeons. However, it's also a dmap type. The overworld dmap has it's own properties. One is the ability that it has to save any flags that have been activated, unlike the the dmap of dungeons. It also does not push you out from the side when moving between screens. However, overworlds do not display message strings and room types directly on the screen they're set on. Instead, they load them to screen 80, and a warp must be set up for them to work.