It's confusing from what they told us exactly who Arawn was fighting for before he died. If the listing of Ages in the first episode was in chronological order, then it went Giants -> Elves -> Humans. That demon thing did look pretty gigantic.

Arawn was seemingly friendly with the elves, and the humans won the war, so probably:

Elves and humans won the war and lived together, Elves being the dominant Empire. Then, when that fell, everything went into chaos, groups scattered, and the Holy Empire rose from that mess.