Sky World has been settled for at least 5,000 years. It is obvious that humans, and elves, did not evolve on Sky World, although the Gods may have created them here. In actuality, all the races came from other planets via super hi-tech / magic gates. It was part of a long term breeding program maybe. (See "What Good are Chocolate Manhole Covers" by Larry Niven).
Sky World has been in a Dark Age for the past 500 years. This Dark Age had a number of unusual root causes. The first cause was a plague. The plague killed off some 50% of the worldwide population over a 100-year period. The massive death toll would not by itself cause a Dark Age. Unlike a continental world, much of Sky World depends upon trading vessels. The plague caused the larger islands to ban vessels from landing to hopefully prevent the ships from bringing the plague to the island.
The lack of trading vessels visiting smaller islands often spelled doom for them. With no trade, the smaller islands were thrust upon their own resources. Most islands would have sufficient food growing capacity, but depended upon trade for tools, medicine, and other items. Isolated islands were also easily wiped out by the plague. If the population fell to far, there would not be enough people to support or continue society. Crop failures also made isolated islands vulnerable. What would have been an expensive import becomes a lack of food.
The plague also made the civilized world vulnerable to another root cause. The plague wiped out, or forced the withdrawal of many military forces from the frontiers of the civilized empires. Barbarians are able to raid outlying islands, and even some of the inner islands. The unique geography of Sky World makes it easier for a raiding part to hit the inner parts of the empire. All they have to do is avoid sky borne patrols and run really fast. There is no real frontier that can be easily defended by forts and walls. See the Viking raiders for details.
Over population in the fringe areas of the civilized world lead to more barbarian invasions. As the barbarian population rises, their society seeks relief valves. At first, inter-tribal warfare will control population through direct warfare deaths, but mostly from decline or destruction of farming land and farmers. Over time, barbarians whether Human, Orc, Goblin or other races, will start attacking outlying provinces of the more advanced civilizations. When the civilizations are strong, they will resist and defend themselves.
When civilization is weak or the Great Powers are in economic and social decline, the provinces will be given their freedom. Usually that means the freedom to be conquered by the barbarians. If sufficient barbarians exist, the center of one or more civilizations can be overrun and destroyed. The same problems of a decline or destruction of farms and disease will greatly populations and trade.
Overpopulation at the center of a civilized country leads to lower standards of living and less money being spent of defense or civic improvements. Keeping the Mob feed and entertained draws most of the State's budget.
Another factor in human history is dragons and other monsters. Dragons will settle in on one good-sized island, but terrorize nearby ones. Trade will stop because it's too dangerous. Settlements will be abandoned or wiped out. After a few hundred years, the dragons will either die, be killed or move on.