In the Allegiant book, the Fringe is a poor and run down area outside the fence and it is where Four, Tris, Caleb, Peter and Tori go when they were trying to explore the world outside the fence. But it is also the place where Natalie Prior was snuck into the city with her memories wiped and planet within Dauntless in the Chicago experiment. Tris learns about the Fringe when David talks to her and she looks at her moms memories.
In the film, the Fringe is the wasteland that surrounds the few inhabited areas in the world of Divergent.
Back in the days before the war that almost wiped out the human race, the wasteland known as the Fringe was lush, green, and perfectly habitable. Following the war, it ended up as a polluted desert, with ruins of buildings littering the scenery. The lands and the rain are as red as blood, and very little plant life is able to survive. It is implied that the area is either toxic or irradiated, as once Tris and her party arrive to the Bureau of Genetic Welfare, they undergo decontamination, and their clothing is incinerated.
Despite the Fringe being toxic, some plants, and even people are able to survive. These people live in makeshift camps, and are seemingly divided into those that are peaceful, and raiders. Additionally, those not born in the Fringe may likewise be able to survive, however the long-term effects of the pollution on both the Fringe natives and non-natives are unknown. Bureau operatives use protective clothing when venturing out into the wastes. It is implied that the clothing somehow protects them from exposure.
Certain areas in the Fringe, such as the Bureau's headquarters, or the Council's headquarters - are separated from the rest of the wasteland by invisible force-fields that have two functions: 1) to assure security of the area in question, and 2) to camouflage the existence of the outside world from the inhabitants of experimental cities such as Chicago.
Additionally, areas immediately surrounding the cities have a more varied plant life that thickens out the farther one ventures from the city.
For the film, The Fringe has been created using CG technology by the company Animal Logic, in collaboration with visual effects supervisor Stefan Fangmeier and visual effects producer, Erika McKee.