Where does Jack set up headquarters?

Jack sets up headquarters at Castle Rock, a fairly unimposing semicircular cave. The strategic location of the cave and its proximity to the sea make it a potentially impregnable fort. Jack realizes this the first time he lays eyes on it when he and Ralph go exploring the island in search of the beast:

What a place for a fort!

Jack's enthusiastic outburst is a crucial piece of foreshadowing in the story. We realize at once just what an important symbol Castle Rock will become later on in the book. Unfortunately for Ralph, he is so fixated on hunting down the beast at the time that he ignores Castle Rock's strategic value. This makes him increasingly unpopular among the boys, which allows Jack to exploit their grievances for his own personal gain.
In due course, the Castle Rock will come to symbolize Jack's power and his control over the other boys. The location of the cave provides him with an ideal vantage point from which to monitor the activities of both allies and enemies alike. It also gives Jack a strategic advantage over Ralph in that it allows him to make regular sorties into enemy territory without leaving his power base vulnerable and open to attack.