Ice Valley is the home of the main characters from Ice Age to the end of Ice Age 2: The Meltdown. As it's name implies, the valley is primarily made of ice and snow. It mostly got is name due to the naturally shaped water park and an ice dam to stop water Grimm flooding the area.
During Scrat's chase for his acorn, it's pointed end landed on the ice dam. It caused a crack in the ice dam and began breaking. The water flooded the area, causing others to flee and make a new home in the Snow Valley.