In the beginning, the Creator - Eru Illuvatar - composed a great melody. The spirit children of His thought, the Ainur, each played their assigned part - except for one. Melkor, the strongest of the Ainur, introduced to the music a discordant theme of his own design. Thrice he did this, but thrice Eru Illuvatar simply wove His music around the rebellious theme, producing an even grander melody in the end.
When the music was complete, Eru invited the Ainur to look upon what their song had become - a vast and magnificent universe. Many Ainur chose to enter this universe. They found themselves at the beginning of time, and found it was up to them to shape the universe into the grand vision they had seen.
The Ainur were not all the same. Some were stronger, some weaker. Each had their own sphere of interest and talent, and each had a valuable part to play in the task they were about to undertake. The greatest among them were called the Valar; the lords of creation. The remaining Ainur were known as the Maiar, powerful beings in their own right, each working under one of the Valar and playing a vital role in their tasks.
For countless ages they labored - billions of years as humans would count this time. They kindled stars, forged new elements, assembled planets, and wove together galaxies. They were countless in number, and each produced numerous works. Throughout the universe they spread, each finding their own place to dwell and work in. A certain group of Valar and their Maiar followers came to focus their attentions on a young star system in an average spiral galaxy. This place would come to be known as Arda. The Ainur there were charged with preparing it for the coming of the Children of Illuvatar - the prophesied beings who Illuvatar would bring into existence by His own hand.
But during all this time, Melkor had not been idle. He had entered Ea - the universe - at the same time as his peers. His power was greater than any of theirs, yet he was jealous of their favor with Eru and scornful of their obedience. His greatest desire was to create whatever he wished, according to his own will. But this was denied to him. Feeling robbed of his true desire, he determined instead to ruin the creation of Eru and the Valar in any way he could.
At first he wandered the vast spaces of the universe, instigating and finding delight in the great cosmic forces of destruction. Under his influence, stars ended their lives early and violently, immolating whole solar systems and star clusters in their death throes. Nascent seeds of life planted by the Valar died before they could sprout. Melkor's domain was entropy. Death, dispersion, darkness, coldness, silence. The scattering of organized matter, the cooling of all things warm, the stilling of all things in motion, the cessation of all natural processes. The antithesis of life.
During this time, he learned he could not always destroy life outright. It was simply too resilient. But he was a cosmic being, capable of great patience and long planning. If life could not be snuffed out, he would ensure that it thrived too well. Its success would be its undoing. Life that grew and consumed resources faster than its environment could support was just as doomed as life snuffed out by a supernova.
As Arda took form, it inevitably drew Melkor's gaze. The natal planet Earth became a battlefield, delaying the birth of life. Geological turmoil that had begun to still was rekindled, turning the land molten and the sea and air poisonous. Fires raged as Melkor bombarded the Earth with asteroids and comets. Eventually, he managed to collide another planet with the Earth. With this cataclysm he hoped to destroy both planets utterly. But instead they merged, and a piece that broke off was fashioned by the Valar into a shield against Melkor's continuing attacks. It became Earth's moon, and would forever bear the scars of that celestial conflict.
After long struggle, the efforts of the Valar overcame those of Melkor. The supply of loose rocks and planetoids he could hurl at the Earth dwindled. The sea and land settled into their places, and life began to thrive. But Melkor struck again whenever he could. Whatever the Valar built, he would seek to destroy. If they raised land from the sea, he would flood it. If they planted a forest, he would burn it. Anything he could not destroy, he sought to corrupt.
One of the Valar was Yavanna. Her domain was the birth and nurturing of all living things. Under her care the Earth blossomed with life. The barren seas filled with tiny organisms that would refine the air for those to come. The land sprouted with great green plants of all shapes. First the sea, and then the land filled with animals of every shape and size - swimming, crawling, leaping, galloping, flying. Great forests, grasslands, and jungles grew and thrived, and the creatures that filled them abounded with ever-increasing stature, intelligence, and feeling.
Many long years passed before the coming of the Children of Illuvatar. The first were the Elves. They awoke in the far east of the land later called Harad, and migrated west. They were hunted and tormented by Melkor and his servants, until they found sanctuary with the Valar. An age later, humans appeared on the Earth. The Elves were then called the Firstborn; and humans the Secondborn.
More centuries passed. Melkor became known as Morgoth, the "dark enemy of the world." He continued his campaign against the Valar and the Children. All cosmic concerns faded from his attention; he became entirely focused on Arda and those who dwelt there. He could not destroy the Children, so he did everything in his power to corrupt them. The Elves, for the most part, were wise and peaceful people who had a deep connection to the natural world and lived in harmony with it, even when engaged in industrial pursuits such as mining and smithing. They produced crafts and artifacts of incomparable beauty and quality, with the greatest of their works rivaling even the Valar's.
Some elves, Morgoth seduced and manipulated toward destructive ends. Others, he corrupted in more direct ways. Through unspeakable dark arts, he twisted them into Orcs - vicious beings with hearts full of violence and hatred. The Orcs retained the Elven proclivity for industriousness, but without their wisdom, their love of nature, or their dedication to the quality of their craft. Orcs would live in caves and burn down a forest to fuel forges producing the crudest instruments of war and torture. They would destroy their own land in such a manner until it could no longer sustain them; then they would raid and ravage neighboring lands instead of re-cultivating their own. They did not plan for future generations. They were concerned only with the immediate satisfaction of their base cravings. If they had the capacity for love at all, it was only a selfish kind - love for self, and perhaps close kin - but disdain or hatred for all others.
It was not only the Elves who suffered from Morgoth's attention. When the humans awoke, he hated them just as much. They had many characteristics he learned to twist to destructive ends. Their fierce passion to defend their families and tribes. Their desire to understand and control the world around them. Their fear of death. Even their love could be twisted - if a man loved his own tribe, he could be induced to hate a neighboring tribe if they were made to seem like a threat.
As with the Elves, Morgoth was not content to corrupt humankind only by subtle means. He mixed the bloodlines of humans and orcs, bringing that distilled depravity into the human lineage. From then on, there would always be humans who behave like orcs. Living without wisdom, without regard for consequences, caring only to satisfy their base impulses. Ambition without wisdom, passion without empathy, hunger without moderation. Ravenous, ruthless, brutal, unrestrained. Destined to destroy themselves, and if unchecked, the rest of Arda.
In his quest to corrupt the Earth, Morgoth poured a great deal of his power into it, leaving himself progressively weakened. After long millennia of this, he found himself bound to a physical form, unable to leave the world he had poisoned, for too much of his power was bound up in it. Yavanna found hope and an opportunity in this. She left the Earth and planted a new garden on another world - a moon of one of the planets orbiting the nearest star to Earth. She filled this moon with new and wondrous forms of life. Her husband Aule - the lord of geology, forger of the elements, and father of smithcraft - went with her. He devised a new mineral and planted it in the ground, using its exotic properties to sculpt the land into wondrous forms not seen on Earth. Their brother Ulmo, lord of the seas, also joined them for a while and lent his touch to the new world's oceans.
Through their combined efforts, this place became a paradise; exotic and glorious. After ensuring that this new garden would continue to grow and thrive, they returned to their duties on Earth.
When Morgoth was finally defeated and cast into the Void, Yavanna returned to visit her new garden, and was amazed at what she found. New children of Illuvatar, who called themselves the Na'vi, were living and thriving on this world! Eru charged her with their guardianship. She was given slightly greater authority than the Valar had over the other Children. She was not to coerce or compel them in any matter, but she was permitted to issue instruction and commands; and she was permitted to aid them in times of dire need. She took to her new duty with joy. The Na'vi called her Eywa, the Great Mother, and they named their world Eywa'eveng - "Eywa's Child." Having seen the desolation brought by industry on Earth, Yavanna gave the Na'vi three laws:
"You shall not set stone upon stone; neither shall you use the turning wheel; nor use the metals of the ground."
From watching the other Children on Earth, she learned that there were reasons beyond simple greed that people turned to agriculture and industry - the threat of famine and sickness foremost among them. So she ensured that Eywa'eveng would give the Na'vi everything they needed to live long, healthy, comfortable lives without industry. She made sure the land would provide food in abundance. She taught the Na'vi how to find medicines for almost any ailment. She taught them how to bond with animals for transportation, work, and companionship. She taught them how to maintain the balance of nature, so these gifts of hers would always be available. And she taught them not to fear death as humans do - for she had seen the evil this fear brings.
Each of the Children of Illuvatar have different fates after death.
The elves are immortal, or at least extremely long-lived, unless killed. The spirit of an elf who dies may wander the world in darkness, or return to Valinor to wait in the Halls of Mandos and someday be reborn. Their fate is tied to the fate of Arda, and what happens to them after Arda is gone is unknown.
Humans live relatively short lives, and their spirit passes out of the universe when they die. This fate - to be released from the struggles and sorrows of the world - was given as a gift, but it has become a source of fear and resentment for many.
Na'vi are mortal, but live longer than humans. When they die, their spirits pass into the Eye of Eywa - the great network of Eywa'eveng, where Yavanna is with them, and the living may speak with them through a bond with a spirit tree. They may remain there for many generations, but no one knows their ultimate fate any more than that of men or elves.
Men may temporarily share in the fate of either race, before passing on to their final destination. They pass through the Halls of Mandos on their way out of the world, and some may linger there for a short time. Likewise, they may linger in the Eye of Eywa, with Yavanna and the Na'vi.
For the next three ages, Yavanna split her time between Earth and Eywa'eveng. Even after the other Valar had mostly withdrawn from the Earth, she still wandered its lands. But she was grieved by the extinction of her first children, the Ents. And while she had always loved humans, she was saddened by the destructive tendencies that Morgoth's corruption had seared into their nature. Eventually, the humans' mounting industrialization and disregard for nature grieved her so much, she returned to Eywa'eveng and did not look back. This was around the year 1800 of the Seventh Age.
AN: Regarding Yavanna's authority on Pandora: In Tolkien canon, the Valar are extremely limited in their authority over the Children of Illuvatar. They are not permitted to take direct action for or against the Children, they are not permitted to harm them for any reason, and even giving them commands is seen as taboo if not outright forbidden. This is why the Valar laid down their authority over the world and asked Eru Illuvatar to step in when the Numenorians sailed to Valinor.
Yavanna has been given slightly expanded authority over the Na'vi. She is permitted to instruct and command them, and to aid them in extreme circumstances, but she is still not permitted to coerce them in any way, or to materially interfere with their choices and actions.
The arrival of humans puts Yavanna in a difficult position. All she wants is for life to thrive in harmony and the Children of Illuvatar to live together in peace. She never lost her love for humanity, despite her sorrow at their actions. Her love and commitment to the Na'vi remain as strong as ever. But her authority over humans remains limited. Do their harmful actions against the Na'vi give her any more leeway to act against them, to protect the people whose guardianship she is charged with? Humans who choose to live as Na'vi are a different matter; they have made the choice of their own free will to place themselves under her authority. But this does not apply to other humans. Does their presence on her world change how she can deal with them, or is it as immaterial to the issue as Numenorian boots on the shores of Valinor? She struggles with this dilemma, and continues to use extreme restraint for the time being.