Luskan, also known as the City of Sails, is a port city on the northernmost point of the Sword Coast. It is considered by most to be the furthest reach of civilization, the Spine of the World Mountains which mark what most believe to be the end of the known world (this is of course not true as the Ten Towns of Icewind Dale lie past them) being just a couple hundred miles north of the city.
Built on the ruins of the ancient and magical Orc city of Illusk, Luskan has a very intriguing history. Most of its inhabitants, however, couldn't care less. Luskan is a port town frequented by pirates, thieves and other disreputable folk interested in only one thing: money. Although you could be murdered, mugged or kidnapped at any moment within its walls, Luskan is a very lucrative city. Pirates bring in their booty to be sold to the black market, northern traders frequent the place as a rest stop on their way to the Ten towns during the warmer months, ready to buy exotic scrimshander ornaments, several taverns do a roaring trade in ale and other spirits, the drugs and slave trade are rife (although obviously sublimated) and information brokers and prostitutes ply their trade during the night-time.
The true power in Luskan however lies within the Arcane Brotherhood, a powerful group of evil, ambitious wizards who live in the Host Tower along the shore.
Luskan was featured in first Neverwinter Nights game
Official Campaign and Luskan
The city cannot be visited, although several interactions with Luskan ambassadors and smaller locations located within Luskan territory occur.
It is one of the higher ranking Arcane Brotherhood members, one of the Hosttower, Black Garius who is the main offscreen antagonist for most of the game. He has control over the brutish Lorne and the first Luskan ambassador, Torio.
Once the plot of Garius is, in part, revealed, and his presence at Crossroad Keep removed, Torio is removed from the position of ambassador (Either by hanging or to become an advisor at the keep later in the game).
One reason that Torio was able to hide the plans from the rest of the Brotherhood, is that Garius sent most of the Luskan forces against nearby islands when he himself stole an important codex for summoning golems, and blamed it upon them or made Luskan assume it was them who took it. This is supposedly why there is no major military Luskan force to be seen throughout the entire game. It is concluded that the fleet has withdrawn from the battles once the codex is known to not be there, although nothing comes from it.
Sydney is instated as the next ambassador. You eventually have to kill her after she ambushes the PC on the pretext of her helping defeat the Reavers - which is true, since she had a list of their true names from when they were at the Hosttower.
Other times Luskan are involved in a few minor plots to get a foothold in Neverwinter, while there is very little else they want other then to wistfully see Neverwinter removed, so do not help with preparing Crossroad Keep from attacks - although the aforementioned killing of Syndey was getting the helpful true names needed to complete the plot.