The Great Diminishing

Geological / environmental event

Over the course of many, many millennia the ambient magic of the world is slowly drained away, leaving only a mere fraction of the power and energy that once permeated every being of the land, sea, and sky.

This event was apocalyptic to the great Titans of old, irrevocably diminishing them both in their influence over the world as well as in their physical stature. On the plus side (or maybe not, depending on who you ask), this allowed for the rise of mortal races like men and elves.