It is based on Chinese-type tradition and appearance and also features tall pagodas and a run across what looks like the Great Wall of China. The area appears to be set against a coastal mountain backdrop.
During the beginning of Sonic Unleashed, Chun-nan's continent was torn away from the Earth's mantle when Dr. Eggman awoke Dark Gaia, resulting in the planet shattering into pieces. At some point around the beginning of this crisis, the village elder, Zonshen, left Chun-nan and went outside the village (in the PS3/Xbox 360 version, it was to retrieve the village's treaure that rolled out of the village during the earthquakes). However, when Zonshen did not return after a while, the villagers grew worried about him and eventually entered a uproar.
When Professor Pickle pinpointed a Gaia Temple in Chun-nan, Sonic the Hedgehog and Chip traveled there, where they learned of the village's state upon their arrival. When the duo met Lin and heard her story, Sonic and Chip agreed to help look for Zonshen, and Lin allowed them outside the village. During the night, Sonic and Chip entered Dragon Road, where they both found Zonshen and returned Chun-nan and its continent to their proper place with the Gaia Temple and the Chaos Emeralds. The duo then came back with Zonshen to Chun-nan where the villagers hailed them as heroes.
Some time later, on the PS3/Xbox 360 version of Sonic Unleashed, Chun-nan was invaded by Dr. Eggman's Badniks, trapping all the villagers inside Chun-nan. Fortunately, Sonic and Chip arrived in Chun-nan, having heard reports of the development, forcing the robots to retreat and saving the village. On the PS2/Wii version, however, Chun-nan remained peaceful. Here, Sonic and Chip eventually came back to Chun-nan upon instructions from Professor Pickle to investigate the area further where they found a tablet fragment for the Planet Tablets.
A while later, when Chip called the Gaia Temples to him, the inhabitants of Chun-nan saw their Gaia Temple rise from the ground from the village. When Dark Gaia then began casting the world into darkness while maturing into Perfect Dark Gaia, the inhabitant of Chun-nan watched in horror as the sky above the village turned dark, but soon after celebrated as the world returned to normal after Super Sonic and the Gaia Colossus defeated Perfect Dark Gaia.
In the point-and-click HUB world of the Wii/PS2 version, many of the featured parts of Chun-nan are shown. These spots include:
The restaurant location was featured in a Kung Fu Panda parody featuring Sonic and Chip
Lantern Herbal Shop
The Back Gate
Sacred Shrine (as Sonic the Werehog)
In a parody of a scene in the movie Kung Fu Panda, there is an extra unlockable movie that features Sonic and Chip in Chun-nan fighting over one of Lin's meat buns, exactly like Po and Master Shifu. As they use chopsticks in a game of tug-of-war to try and grab the dumpling, Chip realizes that Sonic is too strong for him, so he tricks him into looking in the other direction. Sonic, however, sees through this and pulls the dumpling back, but then loses his grip on the chopsticks. Then as the two go in a mad dash for the dumpling, Chip pushes Sonic out of the way and eats the food in one gulp (just like Po almost did), only to fall headfirst into a jar with Sonic laughing at him.
This stage could have been named after the Chinese province of Hu-nan. The "Chun" part may come from the pronunciation of China in Chinese (Zhōngguó) and mainly Japanese (Chuugoku), which both literally mean "middle country" due to China's position in Asia. Thus it can be assumed that Chun-nan is in the middle of a certain region in the world of the game.
It is also possible that the name "Chun-nan" is varied from "Changnan", one of the ancient names of Jingdezhen.