The Muugrah system was a star system which contained the planet Muugrah and was located in the middle ground between the Core and the Frontier, but slightly closer to the Frontier. It was just off a trade route in a sector where piracy was a problem. During the Galactic Civil War, the Imperial Navy devoted a substantial amount of its local resources to combating this criminal activity. The Empire also partially relaxed restrictions on starship weaponry for this reason.
Sources
"Buried Treasure" — Challenge 67 (Unlicensed) (First mentioned)