Textual: Even though Mormon did not make a chapter break between our current chapters 19 and 20, there is very clearly a change of subject. As was noted for a similarly non-break between different subjects that now constitute our chapters 18 and 19, this is probably a literary device Mormon is employing to give the feeling of simultaneous actions. Between our 18 and 19 we have the story of Gideon's men meeting with the men returning from having killed Noah and dispersed the priests which likely took place at the same time as Limhi's enthronement and formal acceptance of tribute status. Here, we have Limhi's story being told to a stopping point ("Mosiah 19:29 And now king Limhi did have continual peace in his kingdom for the space of two years, that the Lamanites did not molest them nor seek to destroy them.") and the story of the dispersed priests of Noah picking up.
Rather than a physical break in the text, Mormon uses the term "Now" as a marker of a new subject happening at approximately the same time as the other events. While Limhi was being instated, the priests who had fled continued their actions. The most important of these was the event at Shemlon, and Mormon turns to this event by directly describing the main focal point of the story, the daughters of the Lamanites singing and dancing at Shemlon.
Geography: To connect the locations in our minds, the priests have fled from Lehi-Nephi. While we do not know precisely which direction they fled, we may presume that it was not directly towards Shemlon, as that is the direction from which the Lamanite armies were coming (Mosiah 19:6 "And Gideon pursued after him and was about to get upon the tower to slay the king, and the king cast his eyes round about towards the land of Shemlon, and behold, the army of the Lamanites were within the borders of the land.").
We may therefore surmise that the original path of flight for Noah, the priests, and those with them, would have been in precisely the opposite direction of travel from the Lamanites, and that would take the priests away from the land of Shemlon. This incident, therefore, takes place some time after the dispersal of the priests. They have had time to assess their situation, and double back towards the land of Shemlon.
Social: We have just a few pieces of information about this location. First, verse one appears to indicate that this location was one of repeated actions by Lamanite women, a supposition that is confirmed in the second verse by noting that; "there was one day a small number of them gathered together to sing and to dance." The implications are: