Here's a brief history of the halflings. They were the first people of Athas, along with the ancestors of the thri-kreen. They invented life-shaping biotechnology, and the first clerics and druids were halflings. There were no psionicists or wizards at the start, and Athas was a water world (the Blue Age).
The life-shapers tried an experiment to increase the food output of the ocean. They failed, miserably. The Brown Tide ruined their civilization. The few remaining civilized halflings created the Pristine Tower (presumably using druidic magic) to save the world. They drained the sun (turning it yellow or green) and turned the world green (the Green Age). The Pristine Tower started warping the proto-kreen into the current six kreen subspecies (as well as trin and zik-chil). It also warped the halflings into today's races, leaving some the way they were. Life-shaping techniques were mostly lost. A number of halflings, on the Jagged Cliffs, retain these techniques, as if they're using a cookbook. (Eg they don't know what they're doing, just following rituals, but they can still make life-shaped items. Any attempt to create a new item generally fails or ends in disaster.)
Psionics came out of the Pristine Tower, as well as the pyreen. The pyreen are a long-live "perfect" humanoid race exhibiting features of all the humanoid races. They are, on a whole, wise, benevolent and beautiful (but rare) druids (all 16th-level+ druids and psions) except for one.
Rajaat, the First Sorcerer. The inventor of magic. The most hated being on Athas, except most people don't know he exists. Twisted and ugly but amazingly intelligent, he devised arcane magic. It consists of draining life energy from plants (and animals and intelligent beings, if you're epic) to cast spells. If you're a defiler, and most wizards were in his day (though rare), anytime you cast a spell you destroyed plants and the land itself. This land wouldn't regenerate for at least 100 years, and many cases far longer. Ever wonder why Athas is a desert? Defilers could instead drain the land when they prepared spells instead of when casting them (a stealthier tactic) although people would wonder why there's a wide circle and gray and black ash around your tent... you had to buy plants to keep the suspicious neighbours from lynching you.
Anyway, Rajaat wanted to return to the Blue Age, and put the halflings in their rightful place as the sole living humanoids on Athas and replace the forest with the ocean. Genocide. Alas for him, halflings made terrible wizards, so he got together some human wizard/psions, then known as Champions, and told them to wipe out the other races. Some succeeded, some did not. He himself was supposed to "deal" with the halflings. To boost their power and make them immortal, he stole energy from the sun. Again. Now it's bloated red and very hot.
Then they found out Rajaat's real plans, and, unable to kill him (eg he's totally immune to magic, seeing how he invented it) they sealed him in another plane. He swore revenge. The Champions then started turning into even more powerful dragons. Their leader, Borys, became a full dragon, but went insane. (All dragons do. Whoops.) Do you really want a psychotic wizard/psion of 25th to 28th level flying around Athas wiping out anything not connected to raising his power? Many civilizations were destroyed, including that of the elves. The Tohr-Kreen survived untouched, but the small thri-kreen/avangion nation was destroyed.
Borys eventually came to his senses. The next most powerful champion, Dregoth, didn't go mad, but not knowing this, the other champions killed him. He came back as a lich, and didn't bother inviting the other champions to his "next-life" party. Very rude of him.
...
