Caledon ward is situated in the southeastern corner of Mid Ulster, bordering County Armagh. The area is defined by the River Blackwater, which forms a natural boundary and has historically influenced settlement patterns. The landscape consists primarily of low-lying, fertile farmland interspersed with small woodland areas, supporting a largely agricultural economy. The ward includes the village of Caledon itself, a planned estate village with a compact, linear layout centred around its main street.
The area is closely associated with the Caledon Estate, with the village originally built to house estate workers. Caledon House and its demesne, including wooded parkland, are a dominant feature. The local economy remains connected to the land, with farming and related services being prominent. The historical flax mill and the Church of St. John the Baptist reflect the area's development through the linen trade and its estate heritage.