Because NDBs produce LF and MF radio waves, which travel primarily as surface (ground) waves for the purposes of directional navigation (as is required for NDBs), the ground that is being travelled over matters a lot. Water is flat, for instance, so surface waves travel over water faster and much further than a similar strength wave travelling over rolling hills, built up areas, and worst, mountainous terrain. Basically, the more obstacles and rougher the terrain, the worse the NDB signals travel.

This is most prominent in mountainous terrain as the radio waves try and follow the contours of the ground, which means going over the peaks and into the valleys. The largest problem with this is a phenomenon known as diffraction, where the wave gets scattered slightly as it crests each mountain and tries to go down the other side.

Reflection of the waves also could be an issue, but does not affect NDB directions received by aircraft as much as the relative diffraction of mountains.