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It makes perfect sense! One of the Time Lords was experimenting with a new kind of TARDIS. He built a remote control which would operate it. He did this hoping to merge his original TARDIS with this one in order to hide from the other Time Lords, because no one would ever thiink to look for him inside a rainbow! But he was killed by the Doctor before he could complete his work, and right when he was just about to test it. The handheld controller he made for it was lost and the prototype Rainbow TARDIS was left open. The last known setting he had put it on was set for Ponyland.
Hear me out on this one. The current, Sugar Bowl niceness of Dream Valley is actually a relatively recent change made by the ponies, themselves. Predating that, the various evil overlords, demons, and other borderline Eldritch Abomination monstrousities were in complete control. In fact, them and their empires were the population. The primary source of sports and reaction were constant wars of Evil vs. Evil. They usually held them on Tuesdays.
So this is why the ponies have to deal with so many villains all the time.
According to Hydia, the matiarch of the witches of the Volcano of Gloom, the sugary-sweet goodness that is modern Ponyland is a fairly recent development brought on by the ponies. Given how many Eldritch Abominations and other horrors hide under the surface, that makes perfect sense. The setting used to be a place where evil overlords ruled the land for centuries. Thus, we can conclude that Dream Valley was built over the site of ruined Mordor. The ponies migrated from wherever they lived originally, needed a plot of land to call their own, bought Mordor cheap from the Gondorians, and settled. I defy anyone to come up with a better explanation.
Each time she or one of the ponies passes through the dimensional rift between present day Earth and Ponyland, it allows dark creatures to cross into Ponyland. Nice Job Breaking It, Hero!.
- So where did Tirac come from? Firefly only crossed the rift for help to stop him.
- Unlikely, these villains have always lived in the world where Ponyland is. However, it does seem like a new evil always appear after the previous one is defeated.
Despite what that one song might tell you, it is not a small world after all. If the ponies, glo friends, moondreamers, and potato head kids were all just in different places on the same map, it would certainly explain a lot.
- If it was another planet, then wouldn't that be Earth?...
- It leads to another planet FROM earth and Dream Valley is on this other planet, namely Eternia.