Before human historical records, Waterdeep, then Aelinthaldaar, was the capital of the elven empire of Illefarn. Dwarves, led by Melair, establish a dwarven city beneath Mount Waterdeep in symbiosis with the elves to mine mithral. Upon the Exodus of the Illefarn elves, so do the Melairkyn dwarves disappear deep underground. Humans settle aboveground.