The Genesis of Tibia tells in chapter VI:

During the age of the wars of the unliving, nothing could turn the war luck against the dark hordes. Whereever Banor appeared personally to lead the armies of humans, they triumphed, but on the other battlegrounds they were too often crushed by the dark crowds. Thus Banor asked the gods to help him and the gods in their infinite wisdom created the portal of the souls. ... You all know, what happened in the Genesis of Tibia, but only few are chosen to know about the legend of Sagon.

Part 1 Act 1

Sagon's hour of birth

While the Gods threw the charm of the new beginning over the world and old and new heroes found their way to Tibia via the portal of souls, nobody recognized Sagon, son of Uman and Tibia, who decided to try to go an own way to freedom and peace. Thus Sagon created a small island, located behind the portal of souls. So the Isle of Sagon was hidden from the darkness and their creatures. Together with the godly world tree Crunor he created a new race to populate the Isle. Always in mind to force freedom and peace, he didn't chose the ancient races of beings.

Part 1 Act 2

The inhabitants of the island aggregated the good side of the humans and the magic power of the heroes. To prevent them from abusing their freedom and chosing the way of darkness, Sagon created a special gem, five feet in diameter, shining in the colors of a rainbow. He placed this Gem of Sagon on top of the highest mountain of the island, where it outshone even the sunlight. The aura of the Gem of Sagon protected from now on the Isle of Sagon. No creature of the darkness could overcome its mighty wall of goodness. Thus Sagon was pleased with his work, in awareness of the impossibilty for all inhabitants to follow any dark pathes in the future.

Part 2 Act 1

Rise and fall of Sagon

All creatures of Sagon lived together in peace. Nobody had at anytime any thought of killing or hurting any other being. People had an unhurried life as farmers and fishermen. The Isle was free of weapons and armory. Everybody was kind and helpful to eachother. Nobody had to beg, all possessions were devided equitable. Humor and good feeling was spreaded all over the island. Sagon saw his creation blossom, staying in peace and freedom as he had expected. Thus a smile scambered over his face and he turned away from this paradise he had created.

Part 2 Act 2

One day, Fafnar, daughter of Fardos and the fire, detected the incredible shine of the gem of Sagon. Her destructive potential, which delighted Zathroth ages ago, made her angry about this island of goodness. Thus she was looking for a way to intrude and overcome the aura of the Gem of Sagon. But all her attempts failed over aeons, no spear, no arrow, no magic, .... nothing leaded to sucess. Thereby Fafnar was driven mad, doomed to stare paralyzed at the glamour of the gem of Sagon. Suddenly she exploded in an attack of anger, took the sword of Uman and threw it towards the gem. The sword, blessed by Uman, hit the gem, stuck with a unimaginable crash and split the powerful jewel.

Part 2 Act 3

A flash, brighter than the sun, surrounded the Isle of Sagon. Immediately the Isle trempled, quaked - while the gem of Sagon slowly but surely desintegrated. The inhabitants, scared, fearing for their life tried to flee, but an unthinkable hurrican rised up, and blow the creatures into the air. Moreover a freak tide was rolling over the island, wiping out all existence. The Isle perished ...

Part 3

Wanderers at a new shore

Only a few, had luck and escaped Fanfar's attack. The freak tide had thrown their fisherboat through the portal of souls towards Tibia. Thus they stranded, everybody at another part of the shore of Tibia, nacked, nothing more they kept than their own life, even their souls were marked by the horrable incident. Over the years, after lots of adventures, struggles, battles and everyone with his own experiences, some of those lost souls met again. In remebrance of their descent, they crowded together and called themselfes the wanderers of Sagon.