Revolution
After the revolution of Du'hra, it became increasingly difficult for the kingdom to keep control over Midway Island. This only got worse as Du'hra got more wealthy and could enforce its borders against the kingdom. Eventually, it became too expensive to collect even taxes and the island seceded away from the kingdom.
Despite the kingdom's best attempts at keeping Midway Island under control it soon proved difficult with no clear trade routes to the island. Those living on the island had always been mainly human and as such adapted quickly to the new dwarven rule, but when they saw the weakness of the kingdom many of them began to disobey the law. When no soldiers were sent to punish those who refused taxes, it simply became more widespread until eventually, the kingdom had to get all their troops out of the island.