Although it is secondary to the hack-and-slash gameplay, Castle has a plot loosely based on Norse mythology, told with setting changes, unique items, boss enemies and occasional blocks of text. As the story progresses, the setting changes twice; there are thus three towns, each with its own dungeon nearby. The game has a total of 40 dungeon levels, some randomly generated, others pre-designed.
As the story opens, the farm where the player lives has recently been burnt and his godparents murdered. Suspecting that the arsonists came from an abandoned mine nearby, he enters the mine to take revenge.
The Tiny Hamlet and the Abandoned Mine
The player begins in a tiny hamlet, near which he used to live. His farm has been destroyed and his godparents killed. The first dungeon he will travel to at this time is an abandoned mine overrun with creatures and some weak undead monsters (with no draining abilities). It is four levels deep and features no boss battles or powerful items.
The buildings in the hamlet are as follows:
- A Shrine of Odin, which offers healing spells and restoration of drained attributes whether temporary or permanent as well as Remove Curse and Rune of Return, all for a price.
- Olaf's Junk Store, which sells nothing but will buy anything, including the "worthless" items that other merchants reject, for which it pays 25 copper pieces (CP). However, it will not pay more than 25 CP for an item, even when other merchants will. Items which other merchants will pay less than 25CP for will be bought at that lower market price (such as a purse, which sells for 15CP). In some cases, such as boots and cloaks, the broken version of an item is worth more than the normal, unbroken version (i.e. 25 CP versus even less).
- The house of a sage, who will identify any unknown item for a fee.
- Two merchants: a blacksmith (buys and sells weapons, armor, helms, shields, bracers, and gauntlets) and a general store (buys and sells scrolls, potions, spellbooks, cloaks, boots, and containers).
- Two farmhouses and a village well, which have no function and are purely decorative.
After clearing out the abandoned mine, the player finds the first scrap of parchment, and returns to the hamlet to find it pillaged. He or she then travels to Bjarnhaven.
Bjarnhaven and the Fortress
Bjarnhaven is a small town to the south of the fortress, where the player expects to find those responsible for the destruction of his village and the murder of his godparents.
The buildings in Bjarnhaven are:
- The Temple of Odin, Olaf's Junk Store, and a sage, which work the same way as in the hamlet.
- A branch office of the First Bank of Crossroads, where the player can deposit money. He will then not have to carry the money or risk having it stolen by a Smirking Sneak Thief, but it will still be available to spend at shops.
- Four merchants: a weapons shop, an armor shop (buys and sells armor, helms, shields, bracers, and gauntlets), a magic shop (buys and sells scrolls, potions, spellbooks, wands, staves, rings, and amulets), and a general store (same as the hamlet).
- A number of homes and a small fountain, all decorative.
The fortress near Bjarnhaven is 11 levels deep and is held by Hrungnir, the Hill Giant Lord (the only boss in the fortress). Hrungnir carries the Enchanted Amulet of Kings, which grants a resistance to Drain Life (attribute- and experience-draining attacks). When the player Activates the amulet twice, Part I ends, and the game can be imported or started over in Part II. In general, a winning character carried over will have more experience and equipment than one newly created.
Crossroads and the Castle of the Winds
In Part II, the player begins in the town of Crossroads, with the ruins of the Castle of the Wind to the north.
The buildings in the town are:
- A central keep. The Jarl within will not admit the player at first, but after defeating specific bosses, he will provide advice and either money or enchanted items.
- The Temple of Odin, Olaf's Junk Store, a sage and the central office of the First Bank of Crossroads (which carries over any credit from the Bjarnhaven branch).
- Ten merchants: two weapon shops, two armor shops, two general stores, and two magic shops, all the same as Bjarnhaven, and two minor magic shops (buy and sell potions, scrolls, and spellbooks).
- A number of apartment buildings, mansions and a huge fountain.
In the Castle, only the dungeon and parts of the ground floor remain. The dungeon is 25 levels deep and has been converted by the monsters living in it: the crypt has been desecrated, a Necromancer has set up his home (with a bed and desk), and special rooms for elementals and the Giant Kings have been installed. A number of the levels within have pre-determined elements, ranging from minor bosses (such as animal-men surrounded by animals of their respective type, or a pack of ogres who have kidnapped a villager), to rooms full of statues ready to animate upon triggering a glyph in the room, as well as the afore-mentioned Necromancer, elementals, and Giant Kings. At the bottom waits the Demon Lord Surtur, with his devil minions, and the Helm of Storms.