From Tapestries MUCK
The world of Curuoskar was a pristine wilderness with no native sentient population. Curuoskar is a world at the very edge of the galaxy it rests in, and thus had been spared population by space faring races, nor had it be reached by magical settlers. This was to change.
It is widely agreed on by scholars now that around 700 B.L. (Before Layleaux) there was some magical event that affected the entire world. Something shook Curuoskar's ties to its plane of origin. It is widely believed that Curusokar actually merged with one of its doubles in another reality, leaving it precariously balanced between the two in a weak spot in the fabric between such places. It is speculated this was caused by some interaction with gods, though no native gods have ever been found for the world itself.
(The truth is that a lost soul trapped between worlds had made a desperate attempt to puncture the fabric and escape the Nether, entering Curuoskar. The the release of energy used was so violent and uncontrolled the above results were accidentally achieved.)
As well as spanning two realities, the fabric between Curusokar and other places had been seriously weakened. This created a place where it was not only trivial to puncture the fabric between Curusokar and other worlds, but occasionally it just happened on its own, creating brief gateways between the world and random other ones.
In the years that followed, as the world's position in the Nether and two realities stabilized, various creatures entered the world. Some stayed, some left. Some were sentient, others not. A few settlements were known to be created, ruins of them have been found here and there, but nothing 'stuck' until much later.
The place known only as the Cloud Castle was created approximately 500 B.L., possibly earlier. However, its role in history was not to be played out until much later. Nothing is known about how it was created, why, or who originally inhabited it.
It is estimated that about 100 B.L. the first Tapestry was created. Forming gateways to other places, the first one simply formed a direct link between the castle and an archway on the ground, presumably to make it easier to travel between the two.
Over the following years, more tapestries were created, and these touched many other worlds and dimensions. It is estimated that at one time there were several dozen active tapestries.
The first modern explorers that arrived through the world did so through these tapestries. The world was commonly referred to as "Tapestries", in reference to the Great Hall of Tapestries in the Cloud Castle, which is the first thing most people saw of the world. Its true name was not found until much later when a secret library was found and the language decoded by scholars. Many people still prefer to call the world Tapestries even today.
While many of the explorers went on to follow the other tapestries and roam the world, some few went through the single one that went to the ground below the castle, and just south of the archway they created a town on the edge of Lake Alodaelia right where Otter River empties into it. The town was named Layleaux.
The origin and meaning of the name is a subject of debate to this day. Claims were made that it simply occurred to the people that met originally to plan it out as if by magic. The meaning is entirely unknown, but it's usually pronounced the same as "lay low" in the common tongue, and that meaning suited the town as well as any.
The day the year that the name was selected is year zero on the commonly used calendar. However, the first day of the year does not in fact line up with that day, it was just commonly agreed on as the start of several different culture's years.
Protection of Layleaux
Eventually it became apparent that the town was protected. No one was certain by whom, or what. Those that were destructive, and would harm the society as a whole would... disappear. Even the most powerful creatures, some claiming to be gods, vanished with out a trace. This gave the lawless town what little order it needed to survive.
The people that settled came from so many cultures that they had a hard time agreeing on moral codes and other laws. This coupled with the towns protection from real harm by an outside force eventually lead to the very lose social norms that the world became known for. If you didn't harm the world as a whole, it was OK. Your business was your business.
The entities that people assume protect Layleaux, and is it was later found, the entire world, are referred to by the locals as Wizards. As such it is frowed on by the locals for 'mere mortals' to use that title. Thus the various people who practice magic in the world tend to use names like 'mages', or 'sorcerers'.
(In this use the Wizards are actually an IC mirror of the real OOC Wizards. However, they are never seen IC. They remain secluded to hidden parts of the Cloud Castle, and do in fact keep the world, if not the individual inhabitants of it, safe from harm. Roleplaying a Wizard is a policy violation.)
Years of trade
The town grew over the next fifteen years as travelers used it as a way-station between worlds to rest, relax, hide, trade in a taxless lawless place close to the portals they used. The settlement spread out over the valley around the town, with little clans seeking refuge from all over the universe staking out claims here and there. Some went deep into the wilderness and have never been heard of since.
Failure of the tapestries
Tapestries had failed before this time as the worlds they were connected to suffered unfortunate fates, but at about 20 A.L. (After Layleaux) all the tapestries started to lose their power. By 22 A.L. the only one functional was the one that connected the ground to the castle. While there is a great deal of speculation as to why this happened, no one is certain for a fact what caused it.
Left to their own devices, the locals figured out how to travel on their own. This was done through both technology and magic, and there is a great deal of speculation as to if the two are simply facets of the same thing, though the two schools of thought rarely are willing to work together long enough to ever come to a real conclusion on that subject.
It turned out it was trivial bridge the gap between worlds from Curuoskar through the use of magic by any sufficiently powerful mage. Many portals were opened. None yet have the success that the the creators of the tapestries themselves had, and such portals tend to be temporary at best. Even more important, it is very difficult to open them from the other side, if not impossible at places.
Separately some of those of a technological bent managed to fix the place of the world in their galaxies. A few sub-space beacons were built and the location of the world given away in some circles, bringing the first space travel. However, its distance from settled worlds in both galaxies that it overlaps tend to keep that traffic down to just a few far-reaching explorers, and in both its existence is considered a myth more than a fact.
Some highly advanced technology has also been able to reproduce the effects of the mage's portals.
Again the hub of inter-dimensional trade, the world is again doing well. It is fairly 'rich', with most of the population either funded by such trade, or by providing services to those traders. Still a lawless backwater at best, a lot of behaviors that are frowned on in many worlds are considered common place here. From simple things like public nudity and sex, to darker things like slavery.
There is a growing local-born population, but this really has not changed much in the way of the towns mishmash of culture.