The Smugglers' Cave was accessed through a small door in Polly's box-room attic, which led to a cistern. The tunnel was found behind the cistern, which could be reached by climbing.
The tunnel was dark, with a brick wall on one side and sloping roof on the other. The slates on the roof were, apparently, uneven, and little chunks of light could be seen between them.
The Smugglers' Cave was the small area of the tunnel located just beside the cistern.
Since there was no floor in the tunnel that was safe to walk on, only rafters with plaster between them, Polly had to lay out various items, such as old packing cases and seats of broken chairs...etc, to create a type of floor.
She kept numerous items in the Smugglers' Cave, such as her cash box, a story she was writing, some apples and a few ginger-beer bottles (the bottles were apparently what made it look more like a Smugglers' Cave).
She introduced this area to her new friend Digory after they met, and he started to use the cave as well. Their use of this cave prompted them to eventually explore the rest of the tunnel, which led them to accidentally enter Uncle Andrew's study.