King Roland recalled his last visit to the Cove when he was still a young prince and heard about the tales of mermaids living there, However, at the time they were just dismissed as old fishermen's tales.
Years later, Roland returned to Merroway Cove with his own family for a vacation aboard the Floating Palace. Sofia found out the mermaid tales were true when she met a mermaid named Oona and discovered beneath the oceans surrounding the small island existed a beautiful underwater palace homed to merpeople. The island might somehow be related to the island of Crete in southern Greece.
The merpeople of Merroway Cove showed a dislike for humans, seeing them dangerous after a human ship arrived in the cove, the sailors in it abducting one of the mermaids. A battle soon erupted, sinking the ship, which became Oona's grotto, freeing the mermaids, and resulting in injuries to the merfolk, one being the scar on Plank's arm. One of the chests on the ship has the lily of Enchancia on it, marking that the tension when Sofia's family arrived was particulary high due to the Floating Palace being a new Enchancian ship arriving in the cove. But that all changed after Sofia rescued Oona from a Sea Monster, unaware that it was Cedric.