Haunted Wasteland

The Haunted Wasteland is a massive desert between Gerudo's Fortress and the Desert Colossus, far outside the land of Hyrule in. As well as being extremely difficult to navigate, with a lack of landmarks and constant sand-storms, it is also said to be haunted. Due to this, the entrance to the Haunted Wasteland remains closed until Link shows his Gerudo Token to the Gerudo guard nearby. However, before opening up the gate to the young hero, the guard mentions to Link that he will not be able reach the Desert Colossus unless he passes a set of two trials: the River Sand and the Phantom Guide.

River of Sand
The first trial, known as the River of Sand, consists of crossing the large river of quicksand that cuts through the desert. In order for Link to pass this trial, he will need the assistance of either the Hover Boots or the Longshot. Equipping the Hover Boots allows the young hero to float over the River of Sand; likewise, he can also cross the valley of quicksand by using the Longshot to grapple to one of the boxes on the other side of the river. Once Link has successfully completed the first trial, he must follow the series of flags that have been placed throughout the desert. Straying too far from these flags will cause him to wind up back at the entrance of the wasteland.

While following the flag posts, Link will encounter sign advertising a shop. He can follow the direction in which the sign is pointing to find a merchant hovering over a Flying Carpet ready to sell Bombchus to Link for 200 Rupees. It is necessary to use the Hover Boots to reach the merchant since the flying carpet is far off a ledge.

At the end of the flag posts is a stone monument that houses the second trial: the Phantom Guide.

Phantom Guide
Once Link climbs the stone structure, there will be a small plaque mentioning that one with the "eye of truth" will be guided to the Spirit Temple by the "uninvited ghost." Here, Link must equip the Lens of Truth to see a Poe known as the Phantom Guide who will be his guide on the way to the Desert Colossus; however, the Phantom Guide will not take the young hero on his way back to Gerudo's Fortress. Link has to follow the guide closely, since deviating too far from the phantom's path will result in him getting lost and returning to the Haunted Wasteland entrance. While following the Poe, various Leevers will appear in an attempt to distract Link from following the Phantom's path.

Successfully completing these two trials will lead Link to the Desert Colossus, a vast, secluded desert that is home to the Spirit Temple.

Theory
It is probable that the Haunted Wasteland (and indeed the Desert Colossus and Gerudo Valley as a whole) were once the Lanayru Desert and Sand Sea.

Trivia

 * According to The Great Hyrule Encyclopedia from the offical Zelda website, the Haunted Wasteland later became known as the Desert of Mystery.
 * There is a cut Navi dialog within the data of Ocarina of Time that reads "Look at all those flags, can you figure out which ones are real?". This may be a reference to the flags in the Haunted Wasteland.