Ursalia was once homed to thousands of Gummi Bears until they had to abandon the city and escape from the jealous humans who would tried to steal their secrets. Only Sir Thornberry stayed behind to take care of the city.
The city was seen never again until Gruffi along with Cubbi journeyed to Ursalia to find another Great Book of Gummi as their original book was burnt by accident.
The Gummis of Gummi Glen would all return to Ursalia to find the city repopulated by the Barbic Clan of Gummies.
After Gummi Glen was destroyed by a termite, it's possible that the Gummis of Gummi Glen moved to Ursalia.