2000 Years Ago
Arrival of Cetra
The Cetra, also known as the Ancients, were an ancient peoples who went from planet to planet, searching for the Promised Land. It is possible that the Promised Land is, in fact, the afterlife; where the Cetra return to the planet. In the meantime, it seems their mission was to settle on planets to maintain and protect that planet's lifestream and to enrich the world with their knowledge. Long in the past, a group of Cetra arrived on the planet and settled amongst the indigenous humans there.
Calamity from the Sky
Shortly after the arrival of the Cetra another lifeform landed on the planet, possibly following the Cetra. Later known as JENOVA, this creature appeared to the Cetra of Knowlespole, near the north crater where it had landed. It presented itself as one of the Cetra, and brought a message of peace. The truth is, JENOVA was a malicious viral lifeform. JENOVA's cells infected the Cetra of Knowlespole, turning them into monsters. JENOVA and its virus spread among the Cetra, though it left the indigenous tribes unharmed.
WEAPONs and the defeat of JENOVA
In response to the wound JENOVA inflicted upon the planet, the lifestream created 5 huge monsters: Sapphire WEAPON, Diamond WEAPON, Ultimate WEAPON, Emerald WEAPON and Ruby WEAPON. The WEAPONs' sole function was to destroy everything in their paths, thereby absorbing as much spirit energy as possible to heal the wound. However, before the WEAPONs could fulfill their mission, a few surviving Cetra managed to seal JENOVA somewhere near the Nolespole(Northern Continent). Over the next 2,000 years the Cetra dispersed around Earth and their numbers slowly dwindled. The WEAPONs went into hibernation in the North Crater for when JENOVA should return. The planet continued its efforts to heal the wound JENOVA left.
The last 50 years
The Rise of Shinra
Around 50 years ago, President Shinra founded the Shinra Weapons Company. They quickly grew in influence in a world made up of tiny townships with no substantial form of government. In this period, Shinra developed a space program culminating in a manned space-flight plan. The rocket was to be piloted by Cid Highwind, a renowned Shinra pilot. However, on the day of the launch an engineer named Shera (Sierra in Japanese version) stayed below-deck trying to fix an oxygen tank. Cid chose to abort the launch even as he ignited the rockets instead of letting Shera burn to a crisp. Having missed their launch window, Shinra abandoned the mission and put its space program on hold.
At some point in their weapons research, Shinra discovered the fuel potential of the lifestream and dubbed it Mako energy. Shinra realized the profit potential in this cheap and abundant energy source and poured more and more funding into it. Soon the major towns depended upon Mako energy, and with their existing armed forces controlling the operations alongside the corporate divisions, Shinra was poised perfectly for world domination.
The Shinra company designed and built the vast Metropolis of Midgar in the Mako-rich plains near Kalm. There, eight reactors tunneled into the Earth, drawing vast amounts of energy from the lifestream and subsequently causing all the wildlife around Midgar to shrivel and die. It seems there were already towns where Shinra wanted to build its city, and their solution was to simply build over them. As a result, Shinra built the city into two parts: A massive plate was erected, where Shinra employees and the rich from around the world could live a life of luxury. Underneath, the old towns transformed into overcrowded, dark slums. The names of the old towns were forgotten as the original inhabitants of the land died and were replaced by the poor, seeking a new life in Midgar but finding only misery.
Above, Shinra let the people elect a Mayor to keep the people happy. Shinra still held all the power, and people didn't complain as long as things were good. All around the world the same happened, Shinra built reactors in every human settlement on the globe, making the populace dependent on the company whether they liked it or not. Where there was resistance, Shinra countered with force. In Corel, a coal-mining town whose livelihood had been wiped out by the rise of Mako, Shinra troops burnt down the town claiming the people had attacked the reactor. A mineworker named Barret Wallace, who had the reactor's construction, and his friend Dyne were returning from negotiations with Shinra when they saw their town in flames. They were attacked by Scarlet and a group of soldiers. Barret caught Dyne before he fell off a bridge, and Scarlet's troops opened fire on them. Each man lost an arm; Barret his right and Dyne his left. Dyne plummeted from the cliffs near Corel and was assumed dead. Returning to Corel, Barret found Dyne's infant daughter Marlene in the rubble, he took her with him to Midgar and swore to take revenge against the Shinra. Barret chose to graft a gun onto his arm stump. The Golden Saucer theme park was built over the ruins of Corel, invested in by Shinra (a possible reason why Shinra burnt the town). The survivors of Corel moved to the rope way station taking people to the Golden Saucer, scavenging and selling junk to tourists.
Shinra also struggled to bring the Eastern continent and Wutai under its control. Wutai, a large and influential state was governed by Godo Kisaragi who refused to allow a Mako reactor to be built. Shinra waged war upon Wutai, reducing the great civilization to a small tourist resort. During this war Shinra built the city of Junon, once again, simply building over the original inhabitants. Junon was built as a military port, presumably to defend the western continent and Midgar from invasion by Wutai, and it contained the giant cannon Sister Ray as well as numerous artillery installations which would later be used to defeat WEAPON. This war was costly, and as a result of this Shinra made the final move from a weapons manufacturer to a power company.