Revelation 20 describes an event on earth

Yes it does mostly. But it spans the entire 'thousand years' both on earth and heaven. Read carefully you'll see it's sort of a 30,000 ft flyover of events that are described/covered in more detail in other verses throughout the Bible. The completely destroyed condition of the earth .. ie 'the bottomless pit' Satan is left in for those thousand years; the millennial reign with Christ (vs 4) which we know beyond doubt from Jn14:1-4 occurs in heaven. The 'rest of the dead' (vs 5) are the wicked who are all killed at Jesus coming who comprise 'the nations' that Satan can no longer deceive (vs 3) for those thousand years.

Then events after the thousand years (vs 7) are described and so forth.

Satan is released (ie .. in conjunction w/ the resurrection of the wicked dead) to gather his own for the final battle (vs 8). Then (vs 9) they circle "the beloved city" (the 'new Jerusalem' mentioned and described in Rev3 and 21) and then are finally destroyed once and for all.