The Sacred Realm in the Zelda series has always been very mysterious. It seems to be like an alternate dimension, but it is also described as being located somewhere in Hyrule. What is the Sacred Realm really? Is it just the arbitrary name given to the resting place of the triforce, with no other meaning attached? Or does it serve another purpose?
Here's a brief review of each game's description of the Sacred Realm. Starting with the most recent description of it...
Twilight Princess:
When all was chaos, the goddesses descended and gave order and life to the world. They granted power equally to all who dwelt in the light, and then returned to the heavens. The lands where the goddesses descended came to be known as the Sacred Realm. For ages, the people lived at ease, content in mind and body… But soon, word of the Sacred Realm spread through Hyrule, and a great battle ensued…-Lanayru
That doesn't tell us much, it actually kind of confuses things a bit. But let's look at the translation of that text from the Japanese version of Twilight Princess:
The goddesses descended to the world of chaos where there was nothing at all, and created life and order. And after granting power equally to all people, they returned to the heavens. For a long time, the world was at peace, with people's hearts being deeply faithful… But at length, a rivalry ensued over Hyrule, the holy land.-Lanayru
This quote doesn't even mention the Sacred Realm at all, and simply states that Hyrule is what was faught over during the early wars. When you take these two quotes literally, it almost seems like Hyrule IS the Sacred Realm.