It was a time before the walls of ignorance and illusion separated the world of the magical people and the Muggles. The magical folk were greatly outnumbered, as we are now, and this allowed the fear of the Muggles to transform into terrifyingly successful witch hunts and scapegoating. You may laugh at this - Muggles posing a threat to us. But before certain magical inventions, surviving capture by wrathful Muggles was much, much harder, you see. Especially for those of us who weren't as adept at magic, like young children or the elderly. As you can imagine, witches and wizards reacted by forming secret communities in order to be safer, and to practice magic in peace. One of these secret, protected communities was, of course, Hogwarts. Other communities had been breached before by infiltrators. Nonmagical spies would not work after a while, of course. They would need to perform something to prove themselves. No, they used Muggle-borns to further their goals. A newcomer would show up to the magical community, asking for a place to belong. The community would oblige, and, soon afterward, the wizard or witch no one had heard of would be gone and a mob of villagers from their home village that they had supposedly broken off ties with would come in the middle of the night. Or, alternatively, a Muggle-born would come to the community, and a group of Muggles would find them and accuse the magical folk of stealing the child because they showed magical ability - or worse, that the magical folk had given the child to the service of the devil. The area authorities would send soldiers to arrest the witches and wizards and burn them at the stake.
With the founders of Hogwarts' abilities, staying hidden would be much easier. But some of the protection spells they used were new inventions. And even if the boundaries were safe, they were teaching and protecting children at the castle. So, Slytherin proposed that they only teach those with strong, easily-trusted ties to the wizarding community - in other words, pure-bloods - in order to ensure the highest security possible for the students and those witches and wizards connected with the castle. The other founders didn't agree. They were somewhat radical in their time. Gryffindor thought the risk was worth putting his hope of living peaceably along with the Muggles into practice. Ravenclaw was interested in learning more about how the Muggles lived and thought. Hufflepuff thought it was too unfair. Their positions ruled out Slytherin's, and so Hogwarts as a whole accepted any witch or wizard who wanted to learn. Slytherin continued his friendship with the other founders, and was allowed to exclude muggle-borns from his group of students as long as he kept the peace. However, a close call with a battalion of the king's soldiers shook Hogwarts' peace regardless. It was never found out what had led them to Hogwarts, but Slytherin was convinced it was a young witch whose Muggle parents were well-connected to the local nobility. When the other founders did not believe him and refused to take any of the precautions he suggested, he began separating his students and himself from the rest of the school. As his friendships with the other founders deteriorated, he began to breed a basilisk that could, in the future, be used by him or another parselmouth to defend the school from Muggle attackers. They would see, he thought. Maybe, when that day came, they would acknowledge him again and heal their old friendship. That day never came. /p