Bugtown represents the deadly, shattered remnants of Balmorran technological pride--ground zero for the planet's Colicoid infestation. Known originally as Lab 352, the genetic research facility came to be known as Bugtown when the Empire invaded. One of the Empire's many acts of sabotage involved releasing the results of Lab 352's biological experiments: the vicious, mutated Colicoids. The insects quickly overran the area, killing the facility's staff.
Since the initial invasion, the Colicoids have gradually spread from the Bugtown ruins out across the planet. Why the Balmorrans were mutating Colicoids is unknown--everyone behind the experiments seemingly died when the creatures were set free. Still, if answers are to be found, they will be found in Bugtown's databanks.
Once a genetic research facility called Lab 352, this complex became known as "Bugtown" after the Colicoids--mutated insectoids used as experimental bioweapons--were released from the facility by Imperial saboteurs. The Colicoids took over the area surrounding the laboratory and began to infest the rest of the planet.
Republic forces have managed to retake the old laboratory, clearing out the Colicoids and establishing a forward outpost. While much of the Colicoid infestation remains, the population has been contained by the Imperial and Republic fighting; for now, the Republic can keep its unorthodox base.