From RHJunior Comics Wiki
The Mistwall is a barrier of clouds surrounding Antillia. Along with the Dire Swamp it forms a significant but not impermeable barrier to entry by outsiders. The mists can be locally dispelled by magic, as demonstrated by the appearance of Adam near the swamp-dwellers' village. A magical artifact made to attach to an official badge of office also has this effect, acting as a key for officially sanctioned passages like Quentyn's departure.
It may be a similar effect to the "fog lanterns" used by the Questor's Promise and luftships of the Wandering Times. However, wheras the fog lanterns create only a small cloud, the Mistwall is so high and dense that no resident of the The Seven Villages has ever seen the horizon.