What is now called the Fallen Kingdom used to be the grand elven kingdom of Illefarn (or Ilefarn), a forest stretching from the present-day Kryptgarden Forest to the Trollbark Forest, settled in approximately -22,900 DR. The capital city, Aelinthaldaar, was located on the land where Waterdeep now stands. The city was founded in -8,500 DR and was razed in -1,100 DR. Few inhabitants of Waterdeep realize their city stands on the ruins of Aelinthaldaar, and only very little of the elven city remains, most notably as part of ancient crypts. Illefarn was known for its portal networks, created by poet-mages and called song-paths. Very few portals still remain, but at least one, Voices of the Lost, is still active.
During the time of the empire of Netheril, the high mages of Illefarn created a powerful being of pure magic to serve as a defender against the expansionist Netherese. When the Netherese mage Karsus inadvertently slew Mystryl in an attempt to usurp her position as god of magic, the Weave of Toril shut down for several minutes. In order to survive, the Guardian of Illefarn turned to the Shadow Weave for sustenance, and became corrupted by Shar's influence. When the high mages of Illefarn realised what happened, they made numerous attempts to destroy the Guardian, but perished in vain. The conflict led to the collapse of the fragile nation. In the DnD game Neverwinter Nights 2, the Guardian had become the King of Shadows, and is a primary foe in the game. This entire part of the story is non-canon and was made specifically to tie into the game.
Constantly besieged by orcs and affected by the Crown Wars, the elves began abandoning Illefarn around -1,100 DR. In 342 DR, the last Council of Illefarn chose to retreat fully to Evermeet. A number of moon elves of Ardeep stayed behind, and proposed an alliance with the local shield dwarves of Dardath. This alliance, also called Illefarn, existed until 882 DR. This second Illefarn is sometimes confused with another kingdom, Phalorm, a human-elf-dwarf alliance that existed in the same general region from 523 to 616 DR.
Novels and modules
- City of Splendors: Waterdeep 
- Lost Empires of Faerûn
- On Illefarn and its Portals
- Voices of the Lost Portal Network