To celebrate the alliance’s great victory, and to promote prosperity and brotherhood, the great city of Shea was built on the East coast of the Continent. Dwarven craftsman and Elven magic made a city greater then anything the world had ever seen. This ushered a golden age of peace and prosperity for the elder races. But the peace did not last. There were leaders on both sides who felt that Elves and Dwarfs would never be equals. These leaders took every opportunity to sow the seeds of distrust between the races.
Two centuries after Shea was completed the alliance began to break down. A few seasons of bad crop yields from the farms surrounding Shea started a panic that there would be famine. Conservatives on both sides pointed fingers and sparked racial riots. Shortly after that armies were marshaled and the Dwarfs and Elves went to war.
What is now known as the Elder Wars lasted for centuries as each side struggled not only to gain military advantage but also to dominate the city of Shea. As the war raged on year after year with no clear end in site both the Elves and Dwarfs grew desperate. The dwarfs abandoned their ancestor worship and put all of their faith in technology – they created rifles and grenades and then mechanized battle platforms and finally towering metal automated soldiers. Some say that Dwarven ancestors were consumed to power the giant automatons. The Elves also sought out advantages. The elemental house of Earth discovered that the realm of the the undead could be tapped into for amazing power and began to field units of undead creatures lead by dark paladins.
In the end a temporary cease-fire was called – both sides were worn thin and had not known peace in a generation and a half. The Dwarfs withdrew to their mountain strongholds and the Elves to their island cities in the Eastern Ocean. The Elven house of Earth was banned from using necrotic magic and when they refused they were banished from the Elven Isles and became what are now called Dark Elves. The Dwarfs abruptly stopped creating mechanized war engines and automatons. Peace was finally restored to the Continent. It was during this time that a sorcerer of amazing power rallied the disparate human tribes.