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Originally Posted by Nensense Zelda is a pretty contradictory series, the master sword changes it's location constantly. To a Forest right above Kakariko village, to the ghetto of Hyrule Castle town, to the basement of hyrule castle, and then to apparently the lost woods. One of Nintendo's favorite things to do if retcon. |
Actually, the Master Sword doesn't move; but the kingdom around it does. In Skyward Sword its in a forest area, and in Twilight Princess its in the sacred grove which sits in a forested area after the old capital from Ocarina of Time was abandoned. They clearly built the capital over the forest, and when abandoned the forest grew back like it naturally was supposed to.
In Wind Waker, I'd say that after Ganon broke free of the seal he wreaked havoc on the capital, destroying much of it and the Hylians built the castle over the Master Sword to protect it.