The Golden City
Prague has always been a city of legend and mystery. Even the founding of the city, it is said, was foretold by the Czech princess Libuše.
I have always wanted to make a dark alternate medieval city scenario, and Prague - anno, say around 1500, would be an ideal location choice. The way the immense castle looms over the Old Town and all the stories and legends about what has happened there makes it so ripe as an alternate history scenario that it's almost intimidating.
Obviously, the initial player base, being small, would have to be some kind of connected group, like a group of refugees or, well, anything that keeps the group together.
The city could be built in steps as the group is able to explore. There should be maps to find of how the city looked, and what we cannot find, we can invent. The castle is officially the largest medieval castle in the world. There is a lot here to rouse interest and inspiration.
As for the alternate-history bit, well, I'm thinking along the lines of occultism and supernatural mysteries. We could draw inspiration from what is left of Slavonic mythology and pitch that against the harsh, stark attitude of the medieval church, which was very strong in Prague.
For general information about Prague, have a look at the Wikipedia entry.