In the Third Age, the Empire hit rock bottom and it's surprising to many that it even survived this age. Its economy was in ruins; many skills had been lost due to lack of utility in the age of automata, or their holders died at the hands of such. The Dwarves had turned in on themselves and now would soon implode. Elven meddling made things worse as they drove wedges between Dwarf and Man and talked of magical aid without providing it.
One response to discontent was bread and circuses. People still remembered how to kill each other, and gladiatorial games arose in every city of the Empire, along with great festivals, once food and drink production recovered. The Empire now had a functional tax system, but much of it was blown on appeasing an angry populace. Gladiatorial games were a mixture of condemned criminals, debtors, and people willing to risk it all for fame and glory, often people trying to escape poverty. Gladiatorial games and chariot racing were popular, and in Axis, you wore the colors of your favored team: Green, Purple, Orange, Bronze, Silver, or Gold. (There was also an arena run by the Four, off in the mountains, where the chariot teams were Red, Blue, Black, and Green for obvious reasons. Stanislav Kovář, a gnome, became famous by winning every match for a year and a day; the Red was so stunned by his killing prowness that he gave Stanislav a magical blade and set him free.)
As the era progressed, fancy food and drink became a huge business. Elven wine became a major import, even though they kept the best for themselves; ironically, by only sending the cheaper wines, they enabled more people to enjoy it. It wasn't fully addictive but the Empire got a heavy taste for it. Ale was banned due to its association with Dwarves during a large chunk of this age (1033 - 1218 IY), though initially that was to save grain for food.
Magical home luxuries were popular, but expensive; the result is that people wanted them, but could not have them unless wealthy. People especially craved the central air conditioning that second age automata had made easily available to all, but no one could figure out a solution that didn't cost too much or have bad side-effects, like rendering you unable to tolerate natural air, trapping you inside your house. Indeed, the legend of The Death House involved an overly improved home whose contents began to murder everyone in it.
The Prince of Shadows rode high on his previous successes from the prior age. Underhome had not yet fallen, the Elves were undiminished, and the implosion and reconstitution of the Empire meant there was all kinds of opportunity. He grew fat and arrogant. This is when he graduated from ordinary, if spectacular, thieving and con-artistry to weird cosmic bullshit. Stealing abstract concepts. Pilfering love. Fencing dreams. Selling courage to buy wisdom and power. His greatest accomplishment was that he stole the Empire in 1332 IY. It wasn't like it wasn't THERE anymore. Axis and the other six cities still existed. The people in them still did. But the concept refused to take hold in peoples minds. It was like a blank spot. They'd try and take hold of it and it would skitter away from them. You'd look at their flag and crest and refuse to comprehend it. Trying to explain it to a person (some powerful wizards and other icons held onto the knowledge) was like trying to explain advanced magical theory to a particularly dim two-year old. People still carried out their functions but didn't quite know why. The Empire functionally ceased to exist for several centuries; the icon of the Emperor was weakened into almost nothing and it split into what were basically independent states, whose Dukes paid fealty to the Emperor and a small amount of taxes, but largely ran their states as they saw fit... including fighting each other. The Legions were divided and dwindled in skill and glory. Only a single Legion remained under the Emperor's control, the XXII Legion, known ever since as the Faithful Legion. Fucking around with the metaphysics of the world united all the other Icons against him, and the powers he unleashed especially empowered the Archmage.
But it is well known that the Prince of Shadows gives with one hand as he takes with the other. His greatest gift in this age was that he taught an otherwise unremarkable dwarven worshiper of Abbathor how to steal breath from stone. The reasons for which would not be apparent until the turning of the age!
Up until this point, there had been no Archmage. The leader of the wizards had been the Cabalist, who was an apparently immortal human or elven woman, which isn't remembered. She was highly intelligent, kindly, pious, and mostly focused on her studies of the cabalistic Tree of Life of the upper planes, and tried to keep the wizards bent to humble, helpful work that benefited the common man and the gods of good. She was in place both because of her power and as a reaction to the wizard-king, but she was a wildly impractical dreamer and a terrible organizer and leader, and everything suffered under her. After the Empire is stolen, things reach a crisis point, because that won't have been possible if the wards and nodes had been maintained. It is at this stage that the wizard who assassinated the Princess and stole her heart, a gnome of surpassing power and ambition and intellect, struck at the Cabalist. He subdued her, then ritually sacrificed her in an arcane rite and stole her life and probably her Icon-hood. This accomplished, he told the wizards things were going to change.
Taking the title of Archmage, he organized them into five colleges of wizardry, the Red, White, Green, Blue, and Black. Similar to the chormatic dragons, many note, and likewise note that today, like the dragons, one school is dead and one captive, leaving only three a fully going concern. This marks the slow recovery of magic in the world... a long process.
The White College was the one most bent on revenge for the death of the Cabalist, because they carried on her views on magic, as a way to serve humble men and the good gods. But while they schemed and fumed and wailed, the other four colleges were firmly behind the archmage and it never could make a move. The Archmage eventually died of great age, and passed his mantle on to a hand-picked successor. The Cabalist was never avenged, and most mages bid them good riddance.
With the demon cultists and Diabolist still scattered and ineffective and the Empire stolen, the Witch Hunters needed something to keep them relevant. They had to expand away from just hunting demonic cults, and into other cults and similar threats. With the restructing of the wizards and the transition to the 5 Colleges, the Witch Hunters ended both allied with and opposing various factions within the wizards. They helped purge "heresies" left over from the Cabalist era, put and ended up as effectively hired enforcers between the colleges as they scrabbled to put themselves at the top of the magical heap.
The biggest threat they encountered, and part of what drew them into the inner conflicts of the colleges was the heresy of Udovras the Unhinged of the Black College, who was discovered attempting to recreate demon cult rituals in pure arcane forms. He and his confederates planned to destroy the other colleges and take over Horizon.
Deep beneath Axis is a facility with no name, known only to the highest circle of the Inquisitor-Generals. It houses exactly 71 cells whose interiors have been pushed out of this reality, each heavily warded and enchanted with spells lost to time. As of the 13th Age, 58 cells are currently occupied by those threats from ages past that cannot be put down by the artifice of men.
From this point on, competing dynasties ruled various parts of the Empire, which at various points broke into 3, 5, 7, 11, and 131 parts. Maybe. It's a garbled mess. Ludovicus I became Ludovicus II and IV by somehow being alive again for no reason, among other things.
In a Reality War. No one is entirely sure how long the Stolen Empire lasted, beyond at least 250 years. But the theft of the Empire meant the Imperial Calendar... malfunctioned. It's quite clear that Glitterhagen and Shadowport experienced some five hundred years in this time, while the Dwarves experienced a proper two hundred and fifty years, and there's reason to think that Corunost, now long fallen, experienced only twenty years. The official end date of the age is 1582 IY, as established by the Hierophant in the Fourth Age. At some point in this period, the Colleges of Wizardry began a grand rite which lasted many years to re-unite the Empire. This was accompanied by the rise of a more vigorous Emperor who began a crusade to reunite the Empire; the two moved in tandem... we think. This became known as the Reality Wars, and some of the stories from it are rarely believed today, like how the Archmage made 'sons' for the Emperor who were twenty feet tall giants, who could take on an entire Legion. Or how one of them became a demon cultist and betrayed him because Dad didn't pay enough attention to him. If such beings existed, they failed to leave physical remains.
It is known, however, that the major realms bifurcated into competing examples of themselves at the height of the chaos. At one point there were three different versions of Axis and no less than five Horizons. The Archmage SAYS he killed all his shadow-selves and he's the one true original one... but you know, that's what all five of them claimed. It may never be known, since that Archmage is long dead. It is believed that the Prince of Shadows suffered something horrible once he lost the Empire, but this may be wishful thinking and if so, no one knowa what it is. His behavior in the Fourth Age was sufficiently different that some theorize he was replaced.