This is the only time this city is ever mentioned. Presumably it refers to either a real Martian city, perhaps a city famous for its beauty, or something from Martian mythology, perhaps analogous to the Garden of Eden. The word "focative" may derive from the Latin word for "hearth," which became the modern English "focus," in which case it might be interpreted as "focusing mirrors," which could have something to do with Martian telepathy, or as "fiery" or "heat-giving mirrors," although that interpretation is unlikely since Martians have a well-known vulnerability to and fear of fire. Since Gaiman (and Dream) are both fond of Shakespeare, it is also possible that this is a reference to a scene in The Merry Wives of Windsor, in which a comic routine is built around the "focative" case in grammar, and Dream is essentially giving J'onn J'onzz permission to have an erotic dream.
Read the full text of The Merry Wives of Windsor at Project Gutenberg.