...or both!
The 'outworld' which is also it's own world, where caverns are great, jewel encrusted domains and really, nothing is what it seems...wicked, haunted trees where the roots lead to elaborate labyrinths and traps, and intelligent fauna try to consume the unwary tresspasser....and of course...those much darker, seeking to ravish those not from the 'outland', so that their seed might spread beyond the shadow where they reside. Also perhaps 'attacks' from the outworld, where people are stolen, or houses destroyed, as the 'outworld/forest' seeks to gain more of a foothold. Of course, the city or village dwellers are hard veterans of this, and well verse on how to 'stay off' such episodes.
So then...you have a superstitious city, or village, even if technologically advanced, superstition still rules, but tech is king! Innate magic some can do, along with good, technical savvy, yet due to the 'outworld' and the deep, massive magic and technology there which the 'villagers' can never hope to match, but are intrigued, lured...or repelled by it.
/another brainstorm