When Oa and the Elder Gods coaxed the Demiurge to life in 50,000 BCE, magic fluxed and surged across the realms connected to that entity. Bridges of power connected multitudinous demesnes into a network called the World Tree, or Yggdrasil, by Asgard.
As the Demiurge settled into awareness, magic became a staple of the human condition. Shamanic traditions and crude totem worship were refined into religion, paving the way to sorcerous talents and then leading to the science of wizardry. Humanity's short, furious lives were nothing compared to the longevity of the New Gods, but they were whipped along by the forces of evolution and competition with startling speed. Humanity went from tribal huts and nomadic hunters to agrarian societies. Magic became so commonplace that entire societies and nations of magic-users gathered together. In 42,000 BCE, they raised a monument to their power, a city of tens of thousands of people and flourishing science and arts. They called this city Atlantis.
Atlantis began as one great city, but became seven united nations spread out across antiquity at the height of the power of the ancient Civilization of Atlantis. Each nation had specific areas of responsibility-- food, military power, magical research, culture and the arts, etc. The names of these cities are remembered in the ancient languages from prehistory.
Atlantis flourished as a culture and as a society. Magical talents were so commonplace that even the meanest of the lowest caste were capable of basic magical ability. Magic was studied as a scientific discipline instead of as a religious contemplation, allowing for the creation of vast machines and infrastructure that would have been otherwise impossible. Atlanteans made regular correspondence with the New Gods, and some-- such as Merlyn-- seemed close to equaling their power. There were even mortals who were approaching an ability to tap into the Source and channel the Power Cosmic itself. Humanity was poised to join the rest of the universe as peers.
In 15,000 BCE, Asgard's celestial war with the mighty Thanagar gained the attention of the Celestials. A violent first encounter with the Asgardians provoked a genocidal response. The Celestials went to war with the races of the Demiurge. They traveled to Earth, preparing to detonate a superweapon that would obliterate an entire galactic sector. They were destroyed at the eleventh hour by the Vishanti and the Demiurge, creating millions of ideologues by channeling the united willpower of all of humanity at once.
Atlantis would likely have survived the Cataclysm-- but they were betrayed by Morgana Le Fay, the Exile. Under the cover of the war she found the lost Cosmic Cube. Once again, Vandal Savage whispered in her ear at just the right moment, nudging strong emotions in the direction of the dark. In a moment of supreme, spiteful fury, she wished for vengeance with all the force centuries of hate could put behind her will.
The Old One known as C'thulu emerged from Nullspace, and the panicked archmages were forced to use their combined power to manage his grave threat. The magi sealed him in a bubble of broken time and sank the city around him under the seas, the bound their spirits to the land to guard the rift for eternity. The city of R'lyeh became the first fatality of Ragnarok. Already pushed beyond the breaking point, the Demiurge was forced to expend the last of its power to trap C'thulu under the ocean. The Demiurge then went silent, reduced once more to a dreaming pre-sentient haze.
In a day and a night of fire, the mountains sank and the seas rose, and Atlantis was destroyed. Their mighty machines were powerless and their magic was sundered. Even basic communication became impossible. Some Atlanteans enacted desperate, last-minute measures to survive, creating domes of force to protect their undersea homes or creating mutations that allow them to breathe and adapt underwater.
The nations of Atlantis lost their key means of communicating with one another. Of the royal family, only two heirs survived. One of them took refuge in the Kingdom of Poseidonis, the smaller center of cultural heritage for Atlantis located south of Greenland. The other took up residence in the larger, more militant city of Tritonis, in the Pacific. In the aftermath of the Calamity, it was lost to the ages who has the true claim to the throne, and the two great nations have maintained embittered but distant relations since then.
Thousands of years of civilization were obliterated overnight. Magic on Earth dwindled to a mere trickle as the Earth entered the Hyborean Era, some score of millennia ago.
But evolution finds a way. Those mystics who survived the cataclysm were hardened by the lack of freely available power. They learned to channel their own willpower and focus, to gather energy from other life forms and spirits. Their progeny would go into the world with the genetic legacy of homo magi, buried for generations yet to come. All that remains of the once mighty empire are xenophobic nations scattered across the world.
Hunger is a harsh mistress, and only the strong survive.