I am designing the start of a new campaign and I was wondering about starting at Level 1 and explaining some of the recent historical changes by having the player's characters be part of the events.
This is frequently done as a literary technique, and I've considered doing it before but never followed through on it. For example, I considered doing one campaign kick off with the PC's as children, having an adventure as children, and then the next adventure be years latter with the same PC's as young adults. This was essentially my 'It' set up.
I didn't follow through on it for a variety of reasons. One of the more practical is a dead PC from the first adventure would cause that player's next PC to be even more an outsider in the second adventure than usual. The strong narrative connection between the original group could itself be a problem. The other was I wasn't sure I or any group I was acquainted with could pull it off.
This would allow the players to steer events how they will but it means several gaps of a year or two between adventures.
I'd avoid that word 'steer'. Accept that by employing this literary technique you are rail roading the players. This is one of the classic rail road techniques. It's highly unlikely that anything the PC's will do will substantially alter the games history if you have this set up to the extent that you have to make up an adventure other than the one you had planned. All you will actually have is the color of having been there and having been involved (similar perhaps to the fact that in Mass Effect your decisions never really change anything but the color of the story).
Does anyone have experience in doing this or are there any obvious problems to avoid
The obvious problem could be players that refuse to accept the rail roading technique on principle. By doing this sort of big hand wave, you are inevitably going to narrate player action. You are going to say something like, "Six years pass uneventfully in the realms. The reign of King Bumpkiss is wise and peaceful. In the spring of 3106, whole the village of Greenhaven is preparing for the harvest festival...." And some PC's is potentially going to say, in effect, "Wait a minute, I'm still 2nd level? My character would never have spent the past six years just sitting around the village working as a hedge mage. I would have gone looking for adventures. I should be like 20th level by now. Most campaigns I go from 1st to 20th level in like 2 game months. I'm motivated. Let's find some treasure. Then we can deal with whatever game event the DM has decided is going to happen in the spring of 3106."
Or the player may feel that there needs to be some system for working out what resources he can accrue in the down time - money, XP, items, research, etc. Or he may be of a thespian inclination and say, "If my character is going to hang around the village for six years, apparently settled down, he's going to take a wife, have children, start a business and so forth. What kids to I have now? Can I have a stat block for my wife? "
When we've done these sorts of things in the past, they've solely been when the PC's have reached an obvious resting point and have made the decision to settle down. That is, they have taken wives, retired from active adventuring, and taken up roles other than itinerant heroes. Then it makes sense to extrapolate what happens in the intervening years and move to the next crisis that might actually draw the attention of such renowned individuals. It doesn't necessarily make sense in the case of 1st level characters, and in general a random group of 1st level characters with typical backstories won't make a lot of sense in the context of 'several uneventful years pass where nothing happens you would take an active hand in because you are content with your life'. I would think you'd need to ask players to create characters where that assumption did make sense and where being settled down was the normal and desired state that the characters would be in, so that they'd only reluctantly be dragged out of it to deal with say, saving the world (and not anything less).