When Saladin swept over the Kingdom of Jerusalem before the Third Crusade in the real world, he started with a crushing victory at the Horns of Hattin, near Tiberias in Galilee. In Outremer, Saladin is just as brilliant, but much weaker, as Egypt and the Hejaz were never incorporated into his empire. He still wins the battle near Tiberias, but Baldwin, the Leper King of Jerusalem and his army were able to retreat to Caesarea on the coast, south of Haifa. The military religious orders - the Hospitalers and elements of the Templars, the Knights of St Lazarus (the Leper Knights), the Knights of the Holy Sepulchre, and the Teutonic Knights - on the other hand, retreated to their fastness around Ascalon. There, despite repeated attacks, Saladin was unable to push them out.
When Richard Courleon, Saladin, and Baldwin made their pact which led to a Muslim/Christian Kingdom of Jerusalem, the area around Ascalon was excepted, as it was controlled by neither Saladin nor Baldwin, and the religious orders refused to give it up. Ascalon became an Order-State, controlled by the Hospitalers, but with all five fighting orders in residence controlling parts of the land.
The Hospitalers controlled the city of Ascalon and it's hinterland. The Templars controlled Jaffa in the north, and the Teutonic Knights held Gaza in the south. The City of Ibelin was the home of the Knights of St. Lazarus, while the Knights of the Holy Sepulchre took the town of Beit Dejan. The headquartes of the five orders were moved to their territories in Ascalon over the next few decades.
By the present of the game - 1560+ - the Order State of Ascalon consists of a triangular wedge of coastline between the Kingdom of Jerusalem/Emirate of El Kuds to the east and north, and Egypt to the west and south. The state is populous and wealthy, and defiantly and almost completely Christian. The land is farmed by a population of mixed native Christians and Europeans, who form the lower ranks of the armies of Ascalon. The Knights take their fighting seriously, unlike many orders of chivalry, and are trained to a pinnacle of skill. The Knights do accept natives and those of mixed ancestry into their orders as well as Europeans, although it is most uncommon with the Templars and Teutons, both of which have vast European holdings.
Here's a map of Outremer:
Map of Ascalon - Style 2 - Ink