Avalon in its present form has existed since the year 800 aDW (after the Divine War). This is over six centuries ago, now, in Avalon years. One Avalon year is around two weeks of your time.
The current balance of powers was a result of the Divine War in which the forces of darkness held their supreme attack against the free peoples. Under the leadership of Diabolus, god of darkness the evil forces wrought ruin and destruction all over the land. Under pleas from the citizens of the City-port, which existed roughly where it can be found today, the Gods themselves came into the fight on the side of the city-port. An army of divine forces was assembled to meet and resist the final onslaught and complete conquest of Avalon. The battle which raged ended in the utter ruination of the whole land, even the Gods seemed weakened as their essence within the earth itself was destroyed. One year after the Last Battle both forces were utterly smashed apart - small pockets of those fortunate enough to escape were all that remained of the past civilisations. It is on this basis that the present situation was formed.
See HELP DIVINEWAR for more information on this great event from Avalon's history and HELP 26 for an entire section with various narratives, many of them from the modern era, about the continent and its peoples.
If you have an interest in a timeline of Avalon's unusually long (it predates the internet itself) history then peruse HELP TIMELINE. You may find you have to gloss over many obsolete "words" no longer part of our 21st Century tech-vocabulary!