Who is this "Mystara" that the beggars in Oblivion talk of? I've searched around the web and all I got was that it was meant to be some kind of Easter Egg from Ken Rolston to the D&D universe which I'm not sure is true or not.

It's the most likely explanation - Mystara is one of the many settings made for D&D and the word doesn't appear anywhere else in TES series (nor does it really appear anywhere else without some link to that setting/D&D in general).

I wonder if they've just come up with some nickname for me. Mystery and whatnot.