Before there was the Labash we know today, comprised of city states, points of light in a dangerous realm, there was Phoenicia. Phoenicia was a rich and powerful sea-trading kingdom, run by a council of elementalist wizards and a powerful king. It was a learned kingdom that invented the alphabet and codified magic, dividing light magic from dark and thus allowing magic to help the kingdom prosper. The kingdom was comprised of beautiful cities with tall spires and a system of paved roads that reached even the smallest of hamlets. Phoenicia held its own against outside threats, and rebuffed outside efforts to divide the peoples against each other.
What Phoenicia could not do was purge itself from its inner corruption. The humans who ran Phoenicia were powerful and greedy. Over time, the king answered to the powerful trade lords rather than to his own people. His advisors were likewise influenced unduly by those with money who could get their grievances heard, whether right or wrong. The greed of Phoenicias governors eventually resulted in a brutal and devastating civil war, in which the Phoenician army was torn apart, with governors marching to war with wizards who could shake the earth or stir the sea to swallow batallions of men in watery maelstroms, even a hundred miles from the sea.
What remains from this greed, corruption and in-fighting is modern day Labash, a handful of city states built atop the ruins of once great Phoenician cities. Phoenicia of old can ocasionally be discovered, often along the ancient trade routes amidst ruins and once prosperous villages. However, one is just as likely to find such an ancient site inhabited by rapacious ogres or cabals of evil sorcerers. Still, there are points of light amongst the darkness, such as the hill village of Winterhaven, once a Summer vacation spot of ancient kings, or the Palace of Faith, a place of healing baths run by priests of the sun god, Melqart [Pelor].
Despite the dangers in Labash, many peoples have found its loose power structure conducive to their needs. Refugees from other kingdoms have settled peacfully in Labash, living alongside humans in a way that would have aroused suspicion in the time of the Phoenicians. The fact that nearly all residents of Labash know a Dragonborn or Tiefling or Eladrin defuses a lot of xenophobia that would have led to war in the past. The destruction of Phoenicia from internal pressures has ironically insulated it from sinister outside influences.
Metagame: I've managed to have fallen civilizations everywhere except for the primary human kingdom. With the Points of Light approach of 4E, I was going to have problems unless I had an underlying civilization or made all the adventures occur outside of the main realm.