The first few times I started I tried to clear Ka'tan (Ironfist) out, but after having to restart the game several times (playing Iron Man, hence the restarts) and getting a small tip from Zedd, I ended up doing:Buy bows, clear out only the enemies between the castle ramp and the first bridge, then ----> On to Ellysia (spelling?) via boat, clear out everything, then ----> On to Sutter's Bay, clear everything out (both quests, both dungeons, the islands + the mobs you spawn from clicking that cooking fire on one of the islands), then ----> Ka'tan, finish clearing everything out (minus the insane, pretty much insta-death dungeon at that level), etc etc...
Basically, follow the main quests and they will lead you to the area that follows a smooth, progressive increase in difficulty.
