Fadden Hills is a small town where Will Vandom was raised before moving to Heatherfield. Her mother decided to move because Fadden Hills held too many painful memories. It is mentioned in E is for Enemy. Susan wanted to move back to Fadden Hills when Will's grades hadn't improved, but Will and the rest of W.I.T.C.H. convinced her not to.
Since Heatherfield, is inspired by and based on cities like New York and Boston, it is likely Fadden Hills is based on Forest Hills, Queens, in New York.