Angels and demons who tired of the endless war between High Heavens and Burning Hells banned together, with Archangel Inarius as their leader, to create Sanctuary. Sanctuary is set in between the realms of Heaven and Hell. To hide Sanctuary, Inarius and the others created the Worldstone. The demons and angels offspring known as Nephalem had the power of both parents, which worried Inarius, for he wanted all of Sanctuary to worship him. Fearing the Nephalems would overthrow him, Inarius altered the Worldstone so that with each generation the Nephalem would become progressively weaker.
When the ruling council of Heaven found out about Sanctuary they voted on whether or not to destroy the world. Out of the five members of the council, three voted to leave it unharmed. When the Prime Evils ( Diablo, Mephisto, and Baal) found out about Sanctuary, they started to make insidious plans to take over Sanctuary and use it to win their war with the Angels. After the Prime Evils were exiled to Sanctuary they were tracked down and entrapped inside Soulstones then buried underground.