The demon and the emperor
A thousand years ago the demon Sathmog came into the world. His prophet was a village priest named Azrahel Koth. The demon whispered until Koth could open a rift and give his master form. With Koth as herald, Sathmog held a demonic realm for two centuries.
Opposition grew. A young hero named Eledain summoned the ancient dragons charged with guarding the world from demons. Mounted on dragonback, with the elder kin as allies, he defeated Sathmog. The demon was banished. Eledain's knights could not slay Azrahel Koth, who had been made immortal. They imprisoned him in a crypt under an island in a lake, in a remote valley. Dranath puts that island in Mirror Lake.
Eledain founded a new empire on the worship of dragons and their cleansing fire. Cities and roads spread. The elder folk grew weary of humanity's advance, and many left. Hafarmal said Oak Sage was already there, older than that empire.
The sword
In those years Eledain forged Um-Durman, the blade of life, to keep the balance between order and chaos. A weapon for the free against ancient evils. In the wrong hands it becomes a weapon of tyranny, demonic darkness or draconic fire.
When Eledain died, the sword was buried in a crypt somewhere beneath the Vale. Opening it needs a special key: a statuette split into four pieces, one for each direction under his rule. His sons turned on one another. The realm grew tyrannical. The dragons turned their backs. The empire collapsed. Then savage orcs swept much of the region, and many humans fled.
What endured were fading words, and monks and knights who still worship the Immaculate Flame. Outskirt sits on those bones. The vandalized statue in the square still wears Eledain's horned crown. Dennis said his mother's bedtime stories of dragons, and of knights worthy to ride them, were not fables.
Dranath named the sword and the four fragments. Astara said the true pieces sing faintly to their kin.
The return
Centuries passed. The stories became myth. Orcs held the Vale in isolation. Oak Sage says Sathmog reawakened Azrahel Koth to seek Um-Durman. Koth is still bound to the island in Mirror Lake, wrapped in a demonic mist that drains the life from the living, yet he commands spies throughout the Vale.
About twenty years ago the dwarves of the Kummer Mountains said those orcs were leaving. People came back over the passes, drawn by rumors of the old empire's riches. They founded Outskirt around the temple ruin, the first kin outpost in the valley.
The pieces have been missing for centuries. They are likely among the ruins. Eledain's servants hunt them. So do the followers of Sathmog. Under Maladûk the orc clans hunted them too. Grub said Ukka has dropped that hunt.