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Win the Red Gem in The Castle of the Lost King and obtain a vehicle that can cross water.
Paws is located a short walk northeast of Britain and The Castle of Lord British, on the other side of a sizable forest. You'll find all size Shops here, and the Guards are set up such that it is very easy to Steal Food and get away unscathed. Watch out for Iolo the Bard, though. The most convenient fact about Paws is that its Weapon Shop complement's Britain's. Indeed, you don't really need to visit any other city in the game than these two.