They live in the country of Panem, in District 12.
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They lived in district 12, in the seam, and because she won the Hunger Games ( Katniss) they move to the victor's village that is in district 12.
Katniss lets Peeta live and saves his life
At the beginning of 'The Hunger Games', Katniss lives in an area of District 12 called 'The Seam', where the less-wealthy inhabitants live. Later, she gains a large home in Victor's Village.
Katniss was born in the seam and lived there until she won the hunger games
In the first book, Katniss and Peeta both survive because Katniss pulls out poisonous berries (referred to as nightlock) and gives half of them to Peeta, telling him that if they both can't live, then niether of them should. In Catching Fire, Finnick, Beetee, Enobaria, Johanna, Katniss, and Peeta all survive because Katniss blew up the force field to the arena.
It Reminds her of her father.