A brief world history:
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The continent of Khorvaire was once united as a single nation. The King or Queen ruled from Thronehold and the Five Nations, Breland, Cyre, Aundair, Karrnath, and Thrane, were ruled by his or her children. King Jarot died about a century ago. His heir, Princess Mishann of Cyre, was supposed to take the throne but Prince Thalin, Prince Kaius, and Princess Wroann rejected the appointment of their older sister. Only Aundair's Prince Wrogar supported the claim.

This led to a hundred years of war. It wasn't a continuous, five sided battle, and there were periods of alliance and peace but the war always resumed with no clear winner. In that time several kingdoms experienced civil war or rebellion giving rise to new nations who were also involved in the Last War.

During this time the great Dragonmarked Houses became very wealthy, by staying ostensibly neutral in the war and supplying all sides with goods and services. This includes warforged, sentient constructs made by House Cannith, and elemental powered ships controlled by House Lyrandar.

The Last War came to an abrupt halt four years ago when the Jewel of Khorvaire, Cyre, was suddenly engulfed in a Dead Grey Mist, killing the entire population and anyone inside. The only survivors were those not in the country at the time and those who managed to flee over the border while the Mist followed them. The Mist halted at Cyre's borders. Cyre became known as the Mournland after that. Two years later the Treaty of Thronehold secured an end to hostilities but it is widely assumed that this is temporary and war will resume at some point.

New Cyre is where most survivors of The Mourning have ended up, it is an old barrack town and camp on the former border of Breland and Cyre and where you are now.