The Sovereigns, beings of immeasurable power that exist on the plane of reality known as Aria, create Daemonkind as a subordinate race meant to serve them. The Sovereigns are the only known source of the energy that sustains Daemons, leaving them at the former's mercy.

Daemons grow resentful of their mistreatment and begin to actively rebel. Rak'Xit, the Inchoate Sovereign, discovers the ability to rift to an alternate plane of existence, "Terra", where humanity resides. The Sovereigns begin traveling there en masse, finding humans to be more malleable subjects than Daemons. In an attempt to turn them into a suitable replacement for Daemonkind, they begin twisted experiments meant to imbue humanity with powers.

Each of the Sovereigns that chose to experiment on humanity creates a branch of empowered humans that specialize in the same style of magic as that Sovereign. The Sovereign of Fire, Tal'Ris, creates Fire Elementals through these efforts; The Sovereign of Dreams, N'Dellex, creates the Dreamwalkers; etc. A'Xerahn, the Sovereign of Desire, experiments the most forcefully, and his efforts backfire when he pushes the human form too far, inadvertently creating Vampires. Meanwhile, Daemonkind discovers that human emotions act as a source of energy for them comparable to that provided by the Sovereigns, offering an alternative form of sustenance.

Humanity chooses to rebel against the Sovereigns' cruelty and ally themselves with the Daemons. Two Sovereigns join their efforts, E'Laetum of Empathy and Min'Ara of Serenity. A horrific conflict erupts, with Terra as the main front of the battle. The Sovereigns appear to be winning given their greater power, but a last minute sacrifice by Rak'Xit of all his lifeforce empowers large numbers of as-yet unempowered humans with his unfocused specialty of magic, creating the Freelancers (and explaining why they're vastly more common than specialized empowereds).

The drastic increase in empowered human forces tips the scales, and the alliance successfully beats the Sovereigns. All Sovereigns except E'Laetum and Min'Ara are bound in the empty realm of "Death" to prevent further conflict, believing that they will eventually 'starve'. A contingent of Serenity Daemons chooses to sacrifice themselves to the cause of watching over the Sovereigns until their eventual end, with plans to feed on the gods to sustain themselves until eventually they all cease to exist. The Daemons take on the new moniker "Deathwalker".

The scale of the conflict and the drastic uptick in empowered humans drawing on magic puts incredible strain on the thin barrier between Terra and Aria, with collapse imminent. This would completely eliminate all of Terra. In order to prevent this, E'Laetum and Min'Ara choose to make the sacrifice to reform themselves as a new barrier between those worlds, which comes to be known as the Meridian.

Daemons discover that, while human emotion is a suitable sustenance source for them, they each are only able to be sustained by particular kinds of emotion. Previously, they were grouped based on the Sovereign that they served, but this revelation causes them to restructure themselves instead into categories based on their feeding capabilities. Daemons that found that they could feed on feelings of Empathy or Serenity choose to keep the name “Daemon” with an “a” as an honorific to the Empathy and Serenity sovereigns that had sacrificed themselves to create the Meridian. All other branches drop the “a”, going by “Demon” instead, as a way of distancing themselves from their prior lives of subjugation.

D[a]emonkind and humanity's alliance and relations wither over time in the absence of a shared enemy. As time wears on, empowered humans choose to keep their power secret from the unempowered masses that far outnumber them. Unempowered humans come to consider magical powers to be fictional. Empowered humans slowly lose their knowledge of their history, with it fading into folklore and then largely disappearing over the centuries. While D[a]emonkind maintains a better grasp on their history, it also becomes considered myth.