There's a problem with this sort of hierarchical approach. While it's fine in most scenarios, it doesn't adequately handle areas/regions that don't fit neatly into a single parent area. Biomes or bioregions, for instance, likely don't correspond in any way to political borders. This edge case might not matter to you, though.

As someone who has developed MUDs for fifteen years, I'd recommend not automatically labeling an entity based on its position within the spatial hierarchy. I'd suggest this be something that is configured. Instead of having world->continent->region->forest->something, I'd abstract this into a simple container schema. Use naming to capture what the container is. It's entirely possible, for instance, to have a forest within a large city, but also to have a large city within a forest. You could then just use "area" to describe pretty much anything (because it's a nebulous spatial term). You could also include some explicit spatial information, if you want.

Area: World
Contains: Continent1, Continent2, Ocean 1, Biosphere 1, City 1
Container: None


Area: Continent1
Contains: City 2, Lake 1
Container: World


etc etc. You can add spatially explicit information to this as well.