Many years ago, the Isle of Etla was divided into several great kingdoms. The kingdom of elves, Avalbane, sat nuzzled into the collapsed volcano to the north. The kingdom of fae, only referred to as the "Enchanted Kingdom", took hold at the heart of the northern forest. The kingdoms of man stood strong across the plains. Though there is no record in the current history books, it is believed there were other great races that ruled the many areas of the island.
Roughly forty years ago, the Fae Queen took a human as her king, and their hybrid princess, next in line to rule, stirred a long standing hatred between the fae and humans. The princess was sent away in secret one night, making it as far as the corrupted city of Valshiem before being separated from her caretaker. This action managed to save the princess's life, however, as the royal family was betrayed and slaughtered. As she had been lost, no one managed to find her to kill her. A great war waged between human and fae that lasted for three years, leaving much of the island a wasteland.
Some years later, when the princess was in her early 20's, she was tracked down by her uncle, the caretaker who'd lost her and informed her of her heritage. With the small bit of fortune that remained from her lineage, she attempted to restore the former fae kingdom to the north.
Valshiem remained unscathed all these years, though those in power over the city changes year to year. Life is by no means 'good' in Valshiem, but it's a life. Potentially a very profitable one, should you find yourself in the right circles...