In the beginning, there were the two spirits, Light and Dark.
They lived together in harmony, and the land that they shaped was peaceful.
The Light inhabited the sky and the grass, and the Dark took control of the caverns and its own realm of origin, The Underworld.
They shaped creatures together - the birds that swooped through the sky, the goldfish that lived in the seas. They also hand-crafted the land - the rolling hills and mountains, the lush jungles, the deserts and the oceans. The Light spawned the Floating Islands - giant floating and moving landmasses with untold treasures inside, and the Dark created the black, unlit caverns in which its playthings, the zombies and the skeletons, roamed eternally in search of prey.
They called the land Terra ria. Land of Peace.
And then they created humans.
The humans were a queer lot - both sentient and sapient, with free will, and the ability to create and destroy, though never as powerful as the two spirits that created them. The Light and Dark would never make humans as powerful as them. Those humans were as stupid as they were clever.
The humans started shifting the landscape, building giant towers and neighbourhoods, creating valleys and hills. Some became miners and tunnelled down into the caverns, digging for precious metals and facing off skeletons and zombies wherever they went. A few intrepid souls even managed to build ladders up to the floating islands, or 'hellevators' down into the realm of the Underworld, and came back with giant rucksacks filled with treasures and trinkets. Those few men were celebrated as heroes. Gradually people began creating encyclopaedias and dictionaries, giant databases cataloging all of the secrets of the world discovered by the humans, the amount of which were gradually growing in number.
The Light took pride in all it had created, and praised the humans for their ingenuity, curiosity and power, but the Dark eventually grew angry. This land was all that they had created, and the humans were tearing it apart! All that work for nothing! And what about all of the places of solitude that they had created for themselves? The humans were sticking their noses into the Underworld, claiming it for themselves. The Light noticed the Dark's fury at the humans and attempted to comfort it, saying that they didn't know any better. But that only fueled the Dark's fury. The humans, it thought, were too smart for their own good.
So the Dark created the Corruption.
It was a secret project, away from the eyes of the Light, and it took several years of crafting and planning to create it. The Dark began sowing the seeds of the Corruption first, placing Demon Altars into various caverns, and then dug giant chasms that skewered the land, and tunnels in which monsters could spawn. These monsters, the Eaters of Souls and the Devourers, were specially built to withstand human attacks, and to kill even the toughest of humans. And should anybody try to save the human race he created the Guardians to face them off - the relentless Eye of Cthulhu, Guardian of the Night, the grotesque and deadly Eater of Worlds, Guardian of the Corruption, and the powerful killing machine Skeletron, Guardian of the Dungeons, cursed into the body of an old clothier that the Dark had lured into the corruption.
The Demon Altars soon began their work, producing noxious gas that seeped into the tunnels, coaxing the monsters out of the chasms. The Altars also created vile powder that spread across the tunnels, turning all stone into tough, purple Ebonstone, and making the grass shrivel and die. The air turned foul as the corruption spread, corrupting trees from the inside out, and the monsters swarmed the land.
It didn't take long for the humans to find the Corruption. By now they had spread across the world, living both in the countryside and in massive cities, and their population was in the hundreds of thousands. They had began experimenting with wires, creating robots and pipes that carried water. They truly were the dominant race of the land.
The countryside village that had discovered the corruption was taken by surprise. They sent a message to a nearby city, whose leader sent an explorer into the corruption. The explorer came back a few hours later, covered in strange green blood and claiming there were 'demons' in there. Soon after, the corruption began to spread. By now most of the land were in a panic about this 'corrupted land'. At the same time, other patches of corruption started popping up in places across Terraria, and more were appearing as time passed on.
As the corruption spread, taking cities and lives, and the Guardians made short work of anybody daring to fight them, the Light retaliated, and created the Hallow. It was a paradise of sorts, filled with multicoloured trees and unicorns that defended the land against the monsters of the corruption. Most people emigrated there, hoping to find peace at last from the monstrosity that was corrupting their world. However the Dark soon found out, and hacked into the brains of the unicorns, sending them mad. They started attacking the people that lived in the Hallow, and the humans had nowhere to go once more.
The Light realised just how far the Dark had descended into madness, and for a while tried to stop it from destroying the land that they had built together. However, the Corruption and the Hallow were growing every day, and behind the war between the Light and the Dark, the humans were dying. They became an endangered species, and gathered together at the edges of the world, hiding from the danger that was fast approaching.
The Light knew it could not undo the creation of the Dark's madness, but decided to strike back one last time. So it gathered all of what little strength it had left, and created a new type of human.
This new human was blessed with supernatural powers, the ability to cast spells and to harness the magic that created Terraria. It was given the ability to create potions, and craft objects and weapons that would help it. It was programmed with a single purpose - to destroy the corruption and bring peace once more.
The Light called it The Player.
Along with this super-human, the Light also created people to help this Player, to guide it along the right path in order to destroy the corruption fully. The Guide, the Merchant, the Dryad, the Arms Dealer, the Goblin Tinkerer, the Nurse, the Wizard, the Mechanic, and the Demolitionist. All of these people came to life for only one reason - to help The Player on its journey.
The Dark soon found out about the Light's plan to save Terraria, and cast the Light into the Underworld, trapped in a wall of flesh, eyes and mouths. Only when the Player manages to kill the Wall of Flesh will the Light ever be released, to battle the Dark once more.