Snippet of info: The dermorian lords guild and the two dwarven guilds have a history of conflict. Their leader hated dwarves, and began (illegal) slavery of the dwarves. So, what happened was dwarven players banding together, resulting in the dwarven wars. It was an actual in-game event that was on-going. To this day, the dwarven guilds have it in their history.
It is rumored by the two dwarven guilds that the dermorian lords still exist.
I'm sure Gharan can possibly confirm what happened. (Look at the dwarves to the side in some of the screen-shots, it may give an indication of the dwarven army 'Dwarvenstar.')