Continent of Tharuunden
Present day Tharuunden was once the capital of a vast dragon empire called Dracaenia. The dragons' rise to power started before major civilizations had developed and before the humanoid races began to grow in population, in around 26 Era of Tribes (EoT). Current archeology and remaining knowledge of this empire state that it stretched to all the known island continents of Fynali and lands beyond that are no longer known, but its control was most strongly felt on Tharuunden.
The native inhabitants of Dracaenia at the time were humans, orcs, and tieflings, all of which were enslaved by the first dragon emperor, Jzargo, who conquered the majority of Fynali during his reign. The inhabitants of Tharuunden were slaves for millennia, used to build massive structures in honor of the dragons, and as a source of food, entertainment, and pleasure when some dragons changed into a humanoid form. The Dragonborn descendants of these relations were shunned by the continent's natives, except their humanoid parent, and completely disregarded by the dragons. Few lived long, and almost none ever reproduced.
Lake Dracaenia / Dragon Lake
The large lake in the center of present day Tharuunden was the home and seat of power of Dracaenia, and the lake is named after it. Lake Dracaenia was once the location of a massive mountain range that Emperor Jzargo claimed as his throne, and the following dragon emperors kept. The name the dragons had for the mountains has long been lost to history, but the humanoid inhabitants of the continent named both the continent and the mountains after the dragon that led the effort to free the humanoids enslaved within Dracaenia: Tharuunden the Kind, a blue dragon with the power of lightning. The highest peak of the Tharuunden Mountains is named Mount Thunder after the signature thunderclap that accompanied one of his fierce lightning breath attacks.
Over time, some dragons began to sympathize with the humanoid slaves of Dracaenia, and helped them to stage a rebellion against the last dragon emperor, Qavorth, Bringer of Death. Tharuunden began by secretly gaining the trust of the slaves and teaching them to harness their own power. Part of the slaves' preparation was setting traps around the edges of the Tharuunden Mountains, to be used to ensure their freedom and the end of the battle. Eventually, more dragons and humanoids joined Tharuunden, and by 589 EoT, the rebels were ready to take decisive action.
The rebelling dragons led the majority of fighting against Emperor Qavorth's dragons while many of the slaves escaped through caves in the mountain range.
The climax of the rebellion was the fight above the peak of Mount Thunder between Tharuunden and Qavorth. The fight ended with Tharuunden putting his entire life force into his lightning breath against the weakened Qavorth, lighting up the sky one last time as the signal for the now free humanoids to trigger the traps. Tharuunden's final thunderclap coincided with a massive magical eruption from the thousands of traps that destroyed the majority of the Tharuunden Mountains, creating what is now known as Lake Dracaenia or Dragon Lake and leaving a ring of peaks around its perimeter.
Post-Dracaenia Development
The empire was not defeated, but many dragons rose to claim the power of the empire which led to several civil wars. Many dragons died, causing the empire to fade, and the few dragons that remained then scattered across the world. Some of the abandoned Dragonborn survived and, to this day, have a secret community living in the hidden caves under Dragon Lake without anyone on the continent knowing of their continued existence.
During their enslavement, the dragons had separated the races based on how useful they would be, thus the orcs were used in a barbarian-style fighting arena, the humans were used for food because of how quickly they reproduced, and the tieflings were used for building due to their tails' added agility and resistance to fire. Despite their segregated duties, the enslaved individuals still lived together in integrated dormitories.
After this, the freed humanoids (now referred to as the Native Races for ease) spread far and wide across the island continent of Tharuunden, with all of the communities having a mix of people from each Native Race. About half settled on the eastern portion of the continent because it was near their escape from the mountains. Many tieflings settled in the southwest peninsula, many orcs and some humans settled in the central area, and many humans settled in the north. The other half settled along the southern stretch of the continent, while others took to the sea to flee their home continent all together.
As the centuries passed, the orc population shrunk and the half-orc population grew. Those that settled on the southern stretch developed a more militaristic society, raiding the settlements on the eastern stretch of the continent, and occasionally across the ocean to the land that would later become the country of Cordillero. This led to a distinct split among the Native Races, eventually leading to the creation of the countries of Terriah in the east and Verastin in the south. To this day, Verastin is a militaristic country, handing down their skill as soldiers and fighters for centuries. The people of the Native Races that settled in present day Terriah also handed down their skills over time.