The name may be misleading as there is really only one forest. However, there are three sections: a birch forest, a pine forest, and an oak/chestnut forest.
There are advantages to settling in either the low ground or high ground. Settling in the low ground gives you easy access to trees, farmland, and iron. The high ground puts you in a position closer to the marsh and stone, as well as providing better defense (if you plan to have an invasion).