In the mythic past, the world was one and the progenitor wyrms, the first and greatest of dragonkind, ruled all. The three most powerful—Siberys, Eberron, and Khyber—discovered (or created) the Prophecy. A world shattering struggle followed, splitting the world into three parts and scattering the Prophecy across the width and breadth of existence. In the end, Siberys became the glowing ring that surrounds the world, Khyber was bound in the darkest depths, and Eberron healed the world between by becoming one with it. Siberys called forth the next generation of dragons, Eberron created all manner of other living things, and Khyber spat out the fiends.
Khyber’s fiendish offspring overrun the surface world, creating a hellish environment where rakshasas and night hags rule supreme.
The giants rise from the ruins of the Dragon–Fiend Wars to establish a vast and powerful civilization on the continent of Xen’drik. They enslave elves and drow, which has the inadvertent effect of pulling the first of the common races out of their primitive state.
The giants revert to primitive monsters living in the ruins of their shattered civilization as the dragons return to their secluded continent and the elves settle Aerenal. Meanwhile, on Khorvaire, the first of the goblinoid kingdoms rises in the area that will one day become Breland and Darguun.