In this age, Underhome fell and the Elves turned on each other in an orgy of blood and death from which they have never fully recovered. A fragile alliance of Dragon and Elf failed to come to full flower. It was an Age of Ruined Hopes.
While the Empire was rebuilding itself, the Dwarves and Shadow Elves decided it would be a great time to settle some old scores. This led to the release of the poisons which turned the Underdark from a wondrous realm beneath the land into the hellscape it is today. The dwarven exodus from Underhome occured. It was the Clerics of Abbathor, of all the dwarven sects, who were the salvation of their people, utilizing the trick the Prince of Shadows had taught one of their number in the past age; how to steal breath from stone. The poisons wrenched loose by the war absolutely ruined the Underdark. In time, creatures would adapt to them; the derro, the dueargar, the mad drow, the Mind Flayers, all of them had their genesis in this catastrophe. But for now the Underdark was deep and dead and silent, with only the broken wails of things that weren't... quite... poisoned enough to die. The drow were nearly destroyed as a people and the Dwarfs didn't do much better.
Underhome was lost and ruined. They say at its height you could have dropped Axis into Underhome and lost it, and the citadel of the Dwarf King put even the splendor of the Great Gold Wyrm's roost to shame. Now all is lost and ruined. The Shield of Seven Salvations is but one of many items lost when Wonderhome fell. It's the companion piece to the Dwarf Kings legendary Axe of Seven Bloods. It was abandoned in Underhome in the exodus; the Dwarf Kings maintain it is still there.
The High Elves saw the rise of the Wizard's Colleges and felt challenged - here they are doing all this new experimentation and organizing of magical ideas, and the High Elves feel left out. Also, they feel a little threatened by the chance of the College growing powerful enough to threaten or even destroy them. So they start cautiously feeling out the chromatics - very tentative, low-level emissaries doing under-the-table meetings that can be officially denied by the higher-ups in the Court, until things get solid enough to make 'official.' It starts as very small, limited things - minor experiments carried out with observers from both sides, joint expeditions to research this or that magical oddity. Very probing, much suspicion on both sides, as with the US/USSR during the Cold War. Sometimes relations between the factions are warmer, sometimes cooler, but the actual researchers and observers involved begin developing a sense of collegiality and even camaraderie. Things never really get friendly between the factions over the ages, but there's often cordiality and decent relations, because both of them realize there's a lot of dangers out there that threaten them both. And there's a certain amount of cross-cultural contamination of the chromatics over the years, as they grow familiar with Elven culture... leading to the eventual future subversion of the Green by the High Queen.
One of the great successes of the relationship, in this age, was the development of the Chromatic Sphere shield spell; with the chromatic dragons supplying the initial powers during the testing phase, and the Elves developing the techniques for transforming and controlling the various color powers into the shield. This was something both sides could cooperate on, as it's a defensive spell that didn't directly threaten either side, but could prove very helpful to each faction against potential enemies from outside.
Working together could lead to love and tragedy. Perhaps the greatest love of the age was that of Ellistra the great Elven naturalist, who had a very strong interest in draconic bodies worked and found many ways to ease and treat them... and Folsung, the rash and competite dueler always getting himself into trouble! Some sarcastic people like to claim they were the origin of the Dragonspawn, but it is generally accepted that the Dragonspawn were created by the Serpent Folk.
During the Second and Third Age, some humans and halflings fled the Empire whether because they lost their livelihood to automatons, got robbed, survived being thrown into the arena and then left or whatever. The High Druid appeared in the Fourth Age and taught them secrets of nature which enabled them to survive and thrive. It was an intimate relationship in which she guided them to a lifestyle of harmony with nature... as she saw it. This included things like hunting. And she guided them on quests where they learned things like the Secret of Rage. At the start of the age, they looked to her for leadership; by the end of the age, they felt ready to be more of equals and she moved on to another project in the Fifth Age, though they remained friendly. Some scholars believe she hoped to use them to fence the Empire in.
Further, the Barbarians allied with creatures fleeing the ruin of the Underdark. These creatures lived in the caves near the surface, while the Barbarians lived on the Surface. They would hunt together at night, the special senses of the cave creatures guiding the Barbarians in the dark.
By the end of the age, the Barbarians had become quite numerous, but pressure from goblins and other humanoids checked their growth, but also checked the growth of the humanoids. Some Barbarians raided into the Empire; in this age, it was often driven by desire to revenge their ancestors more than anything else, but these raids were not yet hugely potent.
The Glitterhagen dynasty had perished in the Reality Wars. The new line of Emperors were of hardy Northerners, and some whisper they might even have had Barbarian heritage. They were decent rulers, but few stand out.
In The Fall of the Elves. The defeat of the Shadow Elves in the Third Age had weakened them in the Elven Court, and now they feared the High Elves were being seduced by the Chromatic Dragons. And the Wood Elves had the audacity to be happy. The fall of the Dwarves did even more damage to the Shadow Elves and they finally lashed out in the final years of the Fourth Age. Throne City (on Throne Point, now long gone), Highrock (now Drakkenhall) and the coast between them were caught in the crossfire. The Elf Queen, who tried to stop the madness, was slain, transformed into a bed of flowers. The Grey Towers were sacked at this time, and many Elven woods and settlements were laid waste. Many Chromatic Dragons 'came to the aid' of the High Elves, wrecking havoc and building their loot piles. A new Elf Queen emerged who finally put an end to the killing, but the life of the Elves was forever changed. At the time, few saw this as the end of an age, but in retrospect, later historians declared this the end of the Age in 1899 when the Compact of the Elves was signed.