Well, the volcano could have erupted at some point - if it was recent, you could have a sort of desert/wasteland, or if it was a long time ago that area could be really fertile so there could be fields maybe? Or, with mountains on either side like that water could drain down into that area and there could be a marsh or swamp. That could make sense with the lake there. Or at least marsh/swamp around the lake maybe? And fields further out? Not sure if people live there, like in a village or something? If it's just a 'wilderness' it could be grassland.