Fluttershy's cottage is a house in Ponyville on the outskirts of the town near its stream. The cottage was built near the Everfree Forest and is presumably very close to Fluttershy's animal sanctuary.
The actual history of the place is virtually unknown and it's unclear who built it. Fluttershy landed in a valley with butterflies during the Sonic Rainboom incident when she was just a filly, so it can be assumed that the cottage is around this locale. Though Fluttershy doesn't live with anyone else besides her animal friends, Discord has been known to make the place his home away from home from time-to-time and the Cutie Mark Crusaders also stay over at the cottage every once and awhile (sometimes with Discord).
Zephyr Breeze also sometimes stays at the place. Even though Fluttershy loves him dearly, he's usually considered somewhat of an unwanted guest due to his obnoxious personality.
In other media
In My Little Pony: Magic Princess, the cabin serves not only as Fluttershy’s residence, but is also home to Smoky, Smoky Jr., Softpad, and the Winterzilla.
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