A popular theory suggests that City of Clouds is actually heaven or paradise. Something that reinforces this is that the inhabitants have wings similar to angels and how this city is represented as well as the happy and relaxed atmosphere is similar to how Heaven is represented.
Some of the residents.
Cloud City Dog
Some more of the locals.
The Cloud City Reception Committee
Auxiliary Reception Committee
The Hippopotamus, Giraffe, and Monkey; Committee number 3!