It is only mentioned in Konrad's biography, where it is implied to be connected to Calradia through a shipping route. It is completely absent from the campaign. Thus, it is unknown if it is considered canon or will be revived in later installments.
It may be the in-game equivalent of Britain. Balion is an anagram of "Albion", a name sometimes referring to Britain, as well as being across a western sea just like Britain is across the British Channel and the North Sea from mainland Europe. Also, no British nation has an equivalent in Calradia, as it would have a Western European design, looking much like the Kingdom of Swadia or the Kingdom of Rhodoks.