Revolution
With the losses in Kunar Island Tharnred Crystalgut II spent the rest of his life trying to keep the kingdom together. When he died, however, the kingdom only fell further into chaos. Seeing the weakened state of the capital city of Du'gar, those who lived on the Sin Ar Isles did not want to get dragged down as well so they revolted to stay out of the inevitable conflict that would soon happen within the kingdom of Du'gar.
Due to how weak the authority had gotten under Tharnred Crystalgut II, the revolt went quickly and without much bloodshed. Despite some efforts from the kingdom to keep them under control and a few disciplinary forces, nothing they did could stop the revolution. Once it was done a new government was installed. This one would not be controlled by a king as both the dwarven kingdoms had not fared well during the second age. Instead, they established a republic of tradesmen. Sin Ar Isle had always been a hub for trade with both Kunar Island and Midway Island so granting more rights to tradesmen meant that the economy quickly flourished.