Sunnyglade was a town in the kingdom of Stormwind at the time of the First War. It was known for its wealth and prosperity. With the fall of the kingdom at the end of the First War, it is assumed the town was deserted, occupied, or razed completely.
The town was raided by the Orcish Horde and destroyed, its inhabitants taken to an orcish compound and enslaved. Later, the forces of the king rescued the prisoners, rebuilt the town, and drove the orcs out of the area.
From looking at maps and comparing the map layout of the battlefield used in Warcraft I, some may speculate that Sunnyglade once rested around the Tower of Azora which would be the tower that is referenced in the mission that Sunnyglade is introduced. The river patterns are roughly the same, and there is a river dividing Elwynn Forest and Duskwood much like there is a river on the battlefield. The bridges may have been razed and the infrastructure removed completely. Also the tileset may indicate that it did take place in a grassy field much like the former Brightwood (prior to its corruption) and Elwynn Forest.