Sunnydale is designed largely for comic effect and narrative convenience. It has one high school but nineteen gothic cemeteries, and despite having only one modest main street, it also sports a large university, a nearby beach, desert, and forest, and many dark alleyways, abandoned mansions and factories. Sunnydale possesses many common horror-movie characteristics, most notably the divide between its demon-fighting, supernaturally aware teens and the sinister or clueless, perpetually in-denial adults.
Sunnydale is "located" ambiguously between Los Angeles and Santa Barbara. The fictional high school which was originally the centerpiece of the series is located on a "Hellmouth," a portal between our world and the darker demon dimensions, which serves as a nexus and attracting point for all manner of evil creatures and happenings. The hellmouth serves both as a narrative conceit and one of the central metaphors of the show, which specializes in drawing supernatural elements as analogies for the difficulties of adolesence.