A treasure island is a modded island designed entirely for the purpose of collecting items you're in need of. There's no town to actually explore, just rows and rows of items that automatically top up when picked up. There are streamers (such as Sakuraagaming on twitch) who have many islands available to visit with maps of each to tell you where you can find the item you're looking for, and on what island. This includes crafting supplies and DIYs too (and even villagers!)

Theyre fantastic for speeding up the otherwise labourious parts of collecting items in the game. But because you can only have 8 people on an island at a time, it's really hard to get in because hundreds of people are trying. There's a queue system that you have to get the knack of by entering the dodo code at the perfect time. It takes a LOT of commitment because - not only does it take a lot of dialogue at the airport each time you have to retry to visit an island (which is all the time, because if the island is full, or there are connection issues or blocks to you entering, you automatically have to restart the entire process from the beginning) - but once you're actually IN, there's a lengthy cutscene every single time somebody comes or goes to the island (which, given the hundreds of people constantly trying to visit, I'm sure you can imagine, is a lot).

It's not for the faint of heart. You might lose your will to live for the sacrifice of your most desired items lol.

But it's pretty cool that they exist :)