I'm thinking of writing a small text-based adventure game, but I'm not particularly sure how I should design the world from a technical standpoint.

My first thought is to do it in XML, designed something like the following. Apologies for the huge pile of XML, but I felt it important to fully explain what I'm doing.

<level>
    <start>
        <!-- start in kitchen with empty inventory -->
        <room>Kitchen</room>
        <inventory></inventory>
    </start>
    <rooms>
        <room>
            <name>Kitchen</name>
            <description>A small kitchen that looks like it hasn't been used in a while. It has a table in the middle, and there are some cupboards. There is a door to the north, which leads to the garden.</description>
            <!-- IDs of the objects the room contains -->
            <objects>
                <object>Cupboards</object>
                <object>Knife</object>
                <object>Batteries</object>
            </objects>
            </room>
        <room>
            <name>Garden</name>
            <description>The garden is wild and full of prickly bushes. To the north there is a path, which leads into the trees. To the south there is a house.</description>
            <objects>
            </objects>
        </room>
        <room>
            <name>Woods</name>
            <description>The woods are quite dark, with little light bleeding in from the garden. It is eerily quiet.</description>
            <objects>
                <object>Trees01</object>
            </objects>
        </room>
    </rooms>
    <doors>
        <!--
            a door isn't necessarily a door.
            each door has a type, i.e. "There is a <type> leading to..."
            from and to are references the rooms that this door joins.
            direction specifies the direction (N,S,E,W,Up,Down) from <from> to <to>
        -->
        <door>
            <type>door</type>
            <direction>N</direction>
            <from>Kitchen</from>
            <to>Garden</to>
        </door>
        <door>
            <type>path</type>
            <direction>N</direction>
            <from>Garden</type>
            <to>Woods</type>
        </door>
    </doors>
    <variables>
        <!-- variables set by actions -->
        <variable name="cupboard_open">0</variable>
    </variables>
    <objects>
        <!-- definitions for objects -->
        <object>
            <name>Trees01</name>
            <displayName>Trees</displayName>
            <actions>
                <!-- any actions not defined will show the default failure message -->
                <action>
                    <command>EXAMINE</command>
                    <message>The trees are tall and thick. There aren't any low branches, so it'd be difficult to climb them.</message>
                </action>
            </actions>
        </object>
        <object>
            <name>Cupboards</name>
            <displayName>Cupboards</displayName>
            <actions>
                <action>
                    <!-- requirements make the command only work when they are met -->
                    <requirements>
                        <!-- equivilent of "if(cupboard_open == 1)" -->
                        <require operation="equal" value="1">cupboard_open</require>
                    </requirements>
                    <command>EXAMINE</command>
                    <!-- fail message is the message displayed when the requirements aren't met -->
                    <failMessage>The cupboard is closed.</failMessage>
                    <message>The cupboard contains some batteires.</message>
                </action>
                <action>
                    <requirements>
                        <require operation="equal" value="0">cupboard_open</require>
                    </requirements>
                    <command>OPEN</command>
                    <failMessage>The cupboard is already open.</failMessage>
                    <message>You open the cupboard. It contains some batteries.</message>
                    <!-- assigns is a list of operations performed on variables when the action succeeds -->
                    <assigns>
                        <assign operation="set" value="1">cupboard_open</assign>
                    </assigns>
                </action>
                <action>
                    <requirements>
                        <require operation="equal" value="1">cupboard_open</require>
                    </requirements>
                    <command>CLOSE</command>
                    <failMessage>The cupboard is already closed.</failMessage>
                    <message>You closed the cupboard./message>
                    <assigns>
                        <assign operation="set" value="0">cupboard_open</assign>
                    </assigns>
                </action>
            </actions>
        </object>
        <object>
            <name>Batteries</name>
            <displayName>Batteries</displayName>
            <!-- by setting inventory to non-zero, we can put it in our bag -->
            <inventory>1</inventory>
            <actions>
                <action>
                    <requirements>
                        <require operation="equal" value="1">cupboard_open</require>
                    </requirements>
                    <command>GET</command>
                    <!-- failMessage isn't required here, it'll just show the usual "You can't see any <blank>." message -->
                    <message>You picked up the batteries.</message>
                </action>
            </actions>
        </object>
    </objects>
</level>

Obviously there'd need to be more to it than this. Interaction with people and enemies as well as death and completion are necessary additions. Since the XML is quite difficult to work with, I'd probably create some sort of world editor.

I'd like to know if this method has any downfalls, and if there's a "better" or more standard way of doing it.