Sherwood Forest was a wooded area in England. The region was associated with Nottingham and Nottingham Castle in the tales of Robin Hood, a mythological leader of a band of outlaws in 12th century England. In the tales, this forest was the abode of Robin Hood and his Merry Men.
To that end, Q turned Vash into Maid Marian, Picard into Robin Hood, and the rest of the command crew into the other famous characters. Picard had to rescue Vash from Nottingham Castle as she had agreed to marry Sir Guy of Gisbourne in order to avoid being executed. (TNG: "Qpid")