In the beginning there was sea of Chaos below (populated by powerful and inexplicable Primordials) and the Astral Sky above (where dwelt the gods). The Primordial named Olorun (or Olodumare) gave shape to the formless while the gods looked down in interest. Other Primordials objected to the Creation and attacked Olorun and his works. In the great battle that ensued, the lightest parts of Creation was ripped away and formed the Feywild, a verdant plane of nature and magic that is home to the Eladrin. The darkest portions were also torn off to form the Shadowfell, a type of underworld that is the source of power for the undead. That which was left formed Tamriel, or the world we know.
At the end of the battle, Olorun was killed, possibly betrayed by his lieutenant, Obatala (terrible schisms and holy wars have been fought on that point), but the other Primordials were so weakened that the gods seized the opportunity to claim the three planes under their control.
The Primordials were in no condition to dispute the claim, and when they had recovered their strength, their chaotic nature prevented them from presenting a united front against the gods or the Creation.
The gods then created life (or so they claim). The Dwarves were grown from the rocks, the Orcs from the swamps (and then devolved into the hobgoblins, goblins and kobolds), and the humans seemed to be everywhere. The Eladrin learned to travel between worlds and crossed from their native Feywild to Tamriel. Those that stayed became the elves. Some that continued on to the Shadowfell were corrupted by that place and became the Drow.
In Tamriel, the first great empire was formed by the Dragonborne, a race descended from the ancient dragons, themselves children of the gods. This empire was known as Hyboria and was a golden era of great learning and prosperity overseen by dragonborne philosopher kings. Or it was a time of tyranny as the other races lived under the thumb of the dragonborne rulers and were forced to build a great empire with their blood, toil and tears. It depends on who you ask.
The Hyborian Empire overlapped the founding of the Empire of Bael Turath (also known as The Dread Dominion), named after the founding Emperor. Bael Turath was a human warlord of some renown until he and his inner circle entered into a pact with eldrich beings. Sages debate whether it was a dark god, demon prince or something entirely different from beyond the stars. Whatever the source, Bael was granted great power, but was also transformed, such that he grew horns and a tail as a sign of his pact. He was the first Tiefling, and his many descendants bear the same look, and a small amount of the otherworldly lower. Strangely, the Dominion had only minor border conflicts with Hyboria until the older empire collapsed, apparently from within, and the Dominion came in to fill the power vacuum.
The Dominion lasted for three hundred years, led by Bael Turath, who never aged, but only grew more insane, but when he died under mysterious circumstances (stories range from poisoning to an explosion that leveled the capital city). Thereafter followed an age of darkness and anarchy as Orcish forces and other great monsters preyed on the disorganized populace. Eventually, a nucleus of order emerged that grew into the Nerevar Federation. The Federation was lead by humans, but included the other major races in a union based on mutual defense and trade. Historic tensions between the races were largely smoothed over as the Federation became internally prosperous while constantly threatened from the outside by armies of Orcs and other dark forces from the East.
The Federation too passed, destroyed from corruption within. But it’s legacy remains. In the current time, smaller kingdoms maintain vigilance against the orcs. Isolated city-states preserve some of the knowledge that had been so hard-won by earlier civilizations. The races live together peacefully, mostly. But in between these bright points of light, the countryside is dark and dangerous. Orkish raiding parties have been sighted on the borders. Creatures have crossed over from the Shadowfell to wreak terror. The forces of darkness lay poised to extinguish what points of light there are in the wilderness, if they get the chance. This is the world we find ourselves in as our story begins.