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Tokyo-3 is a third iteration of Tokyo, after the first was destroyed in the First Impact. It will replace Tokyo-2 when completd.
Tokyo-3 is a settlement established in pre-Impact Hakone (a hot spring town near original Tokyo). The first Tokyo was destroyed by the First Impact, and although Tokyo-2 became an operable city in 2003, the Japanese fear its potential destruction.
As such, Tokyo-3 is built with a number of emergency features, including buildings that can retract into the ground for safety. Tokyo-3 is also the home of NERV and the Evangelion units, which unfortunately attracts the Angel attacks frequently, leading to chunks of the city being destroyed in battle.