Collapse

Exact details are hard to come by but a number of things can be said for sure about this event.

The Magus (dwarven arch-wizards) of ancient Baltur developed magic the kind of which has never been seen since. They named it Shathûr magic and though it was hard to control and could be fatal to the wielder, it allowed for feats that other magic could never equal.

Still not satisfied with all they could do, they now desired the power of the gods themselves. Many decades of research culminated in a massive ritual that was to unlock the powers of the universe and bring the Magus dominance over existence.

We will likely never know what happened, if this power even existed, or if anything could control it. But something did happen, witnesses at the time described it as the sky falling down. The capital city of Banad-Gathol, where the ritual took place, exploded outwards in a wave of destructive magic that did not stop for thousands of miles and obliterated everything in its path.

But the destruction on the ground was nothing compared to that of the home of the gods. All the gods' divine essence was snuffed out in an instant and the gods were no longer. The same was true for magic; it either left the world entirely, or at the very least stopped functioning.

It took decades for magic to return to the world and work reliably again. First it existed only in small pools and then slowly it made its way across the world. This had a profound effect on the more magical races and any nation, ruler, or other power that relied mostly on divine or arcane magic; the world and the power balance changed dramatically. Shathûr magic no longer worked, and though over the ages many have tried to bring it back, it has never worked again. Certain permanent spells and artifacts created before the Collapse a rumored to still work, though always erratically.

Divine energy took just as long to coalesce again, over time new deities introduced themselves to the world. Not as many as there had been before, and the new gods were quite different and with other spheres of interest.

Over time the survivors started to rebuild what was left of their country. With many leaving and so much damage to the remaining cities, not to mention the scorched earth, it took a mighty effort but the remaining dwarves persevered. The center of the explosion is now the Haklur Desert, a vast emptiness and around it we now find the nation of the Godfall, not even a shade of Baltur's former glory but a home to many.

See A short-ish history of the world from the Collapse till now for a greater historical perspective.