The first Elves from Ulthuan to arrive in the Old World from the western coasts penetrated as far inland as a great forest which covered the land as far as the eye could see. This forest, which is now known by humans as the Forest of Loren, is a pale imitation of the expanse that the Elves found. The Elves named the forest Athel Loren, which means the 'Wood of the Dawning of the World'.

The forest was a realm little touched by evil. Orcs and Goblins had never found their way into the wood and monsters were only encountered at its margins and at the foothills of the Grey Mountains. Dwarf prospectors had passed it by as they ventured to the mountains in search of ore. The forest remained a place where Treemen and Dryads dwelled undisturbed. Possibly it was due to these guardians that the forest was such a tranquil place of beauty.

A few of the High Elves colonists settled within the forest, possibly as far as modern day Kislev, where they appeased the woodland spirits and were welcomed as friends and guardians.

At this time, the Dwarfs traded with the High Elves at their coastal cities on the east coast of the Old World. Both empires prospered.

Some say that due to Dark Elf treachery, the war between the High Elves and the Dwarfs, the so-called 'War of the Beard' was instigated. Dwarfs marched across the lands from their kingdoms in the World's Edge Mountains to besiege the coastal ports. To fuel their war machines and to build their siege engines, but also to spite the Elves, the Dwarfs felled the trees of Athel Loren. The Elves, shocked and angered by this destruction of the forest by a harsh, uncouth race defended the woodland realm. The small numbers of Elves in Athel Loren, the guardians of the wild wood, used ambush tactics to prevent the Dwarfs from entering the forest. The Dwarfs were prevented from entering too far into the forest and the modern Forest of Loren was saved from their axes.

After two centuries, both races were exhausted by the war. Ulthuan was suddenly attacked by the Dark Elves and the High Elves decided to abandon the Old World and return to defend their homeland. Most of the High Elves returned, but a few could not bear to depart the Old World. Rather than linger amid the empty courts and pillared halls of the cities which were ruined by the Dwarfs and which were sure to attract foes bent on pillage, the High Elves joined the small band of Elves living in Athel Loren.

The Elves that settled in Athel Loren populated parts of the forest that appealed to them. Typically this was in one of the larger glades, near to springs and to ample supplies of fruit and game for food. The number of clans that settled in the forest was said to be seven in all, so few was the number of Elves that settled and remained in the Old World. This fact is generally used by the older clans for political objectives to set up a tiered system of rulership. Some of the clans dispute the claims and they may be partly right due to the lack of written records and the fact that the past is recorded in songs, plays and dances.

The Elves soon adopted to life in the forest, living and roaming among the trees, hunting game and gathering the fruit of the wild. Some of the Elves explored the lands further to the west and settled in the forests of what is now the Empire. The Elves that remained in the Old World relinquished all ties with the High Elves of Ulthuan and declared themselves independent of the Phoenix King and began to evolve a new society of their own, becoming Wood Elves. Isolated from the wealth and resources of Ulthuan, the Wood Elves avoided the temptations of wealth and luxury that turned some of their distant kindred towards the dark gods, and became a hardy and simple folk. They took to the worship of Kurnous, Isha and Liadriel, gods that were not quite so revered in Ulthuan, but were important to those who lived in the wild.

The Wood Elves clans, through exploration, nomadic movements or divination, gradually made themselves known to each other. Leaders from each clan met in a council to work out clan borders and the sharing of resources without the need to resort to costly skirmishes. Marriages were made between the kinbands and new bonds were forged. It was decided that no clan should rule over the other for fear of kinstrife. In legend it hints that at the first meeting between the clans two Elven youths, Orion and Ariel, left the meeting and explored an oak grove at the centre of which stood an ancient oak of a truly enormous size, the Oak of Ages, that was surely a sapling when the world was young. Orion and Ariel stepped inside a crack in the gnarled trunk of the mighty oak and were never seen again. The legend continues that there was a terrible winter which drove the orcs from the mountains into the forest to seek food and shelter. The orcs rampaged through the trees defiling the fair Wood Elf realm. Invoking the fury of the gods by ritual dances, the Wood Elves succeeded in driving the orcs from the forest as an avatar of Kurnous emerged from the Oak of Ages and slew the Orc warboss. The Wood Elves gave praise to the gods at the Oak of Ages where it was revealed that Orion and Ariel had taken on the aspects of the gods, Kurnous and Isha. Henceforth they were revered as semi divine beings, the king and queen of the Wood Elves. The Oak of Ages became the centre of the Wood Elf realm and the nearby glade was thereafter known as the King's Glade and became the venue for the rulers of the clans to assemble.