Note: This only includes the history encountered while the game was active. If you are looking for what happened in the ten years between where this left off and the new game began, see this post.
Also, Because my hard drive suffered from melty-baddness, I am having to reconstruct this, with help, from memory. So if I miss anything out of note, please reply with the full details (as much as you can remember) and I will see that it gets added in.
1998-1999
Aeternus Sapientia University was situated south of the British coast, on a small island inside English waters. Every year in Septembers students apparated to the grounds, or took the floo, save for the first years. Every first year would take a ship from the Southport docks to the University, to be welcomed by staff and fellow students.
For centuries it was the keeper of an artefact older than much of the wizarding world. It was a pendant which gave the barer both control and insight to their victim's minds and actions. It also allowed them to take control of more than one victim at a time.
This was a place of higher learning - the only one in the UK, just as Hogwarts was. So in 1999, Harry Potter, Hermione Grange and Ronald Weasley came to University, and trouble soon followed.
The dark lord had been supposedly vanquished during their final year at Hogwarts, Cornelius Fudge, Minister of Magic confiscating the only remains of Voldemort - his robes and his wand. These were stored in a high-security facility in the Department of Mysteries and in the months following, Albus Dumbledore petitioned to have them destroyed.
However, just because Voldemort was dealt with, doesn't mean that the world was snuggly-wugglies and kittens. A woman by the name Marianne Harper applied for a job as Potions professor with a view to taking the pendant for herself.
Also at the University, a rogue Death Eater was teaching, with a view to getting her hands on the cloak and wand Voldemort had left behind.
Marianne Harper got her hands on the pendant but was caught with it in her possession by Hermione Granger. Marianne used it to control three students (including Hermione), but neglected to realise Hermione had been able to raise the alarm before she was taken over. Marianne used the three students to orchestrate her escape, the other staff hot on her trail.
Marianne Harper escaped with her life, but at the sacrifice of the pendant. She left a trail of injured students and staff in her wake.
Shortly after, Death Eater Darby Cheswick, Transfiguration Professor at Aeternus Sapientia got in touch with one Robert Broker, a wizard working in the department of mysteries who had overlooked the installation of the new high security defences. With money and a promise of no pain, Darby got hold of the wand and robes left behind by Voldemort and Robert Broker fled the country.
Working within the university, Darby selected Marianne Harper as the ideal vessel for The Dark Lord, and with the help of another Death Eater that had gone into hiding, tracked her down in Spain.
The two Death Eaters brought Marianne to the brink of death, and bestowed the robes and wand upon her. The wand, the horcrux restored Voldemort to power that night and the body of Marianne Harper was never found. Voldemort took his original form, and plans began to unfold.
More Death Eaters were enrolled and others resurfaced, but their numbers weren't enough. With many of Voldemort's Inner Circle still in Azkaban, a Dragon Breeder in Scotland who was pioneering technology to give wizards control over the monsters was enlisted into the Dark Lord's ranks. The Death Eaters sought refuge beneath the estate and laid their plans.
Voldemort's Inner Circle were released from Azkaban one evening with Death Eaters crossing the sea to the prison on the backs of dragons. While the dragons demolished the roof and walls of Azkaban Prison (occasionally stopping to swallow a hysterical prisoner) the Death Eaters kept the Dementors at bay. The imprisoned Death Eaters were rescued and public hysteria set in.
Antonio Dolohov was sent to Russia, where Robert Broker had last been spotted, and erased a large chunk of the man's memory. As a result, Broker was arrested and deported to England where he faced trial and imprisonment in small cells at the ministry while Azkaban was being rebuilt.
Azkaban was re-opened six months after its destruction, with shiny new magical defenses, but also visitors rooms, and Harpies to join the Dementors in the guarding of the prison. The Ministry held an official opening ceremony on a ship at the base of the island.