It is a common saying that lava does not harden into rock, but into fur, and in this way a Quilava is born, for the way in which flames sprout from its back recalls a volcano erupting. The reality is somewhat less interesting; Quilava are an early branch of mammalian pokemon often seen as primitive and rely on these fires to regulate their internal body temperature. Their fur has sacrificed warmth for fire resistance, and was used in the old days to make clothing for firefighters, for it protects the wearer so well that they could walk through Cinnabar Volcano unfazed.
Ironically, the very item which protected Quilava from their own heat and those of predators, after tens of millions of years, became the cause of their downfall. People from farflung desert regions and volcanic islands were willing to pay a premium for Quilava fur. The Emperor of Johto at this time had lost a palace to a Cyndaquil fire, and was eager to comply, but was far more interested in paying off a vast governmental debt than in maintaining the population as a resource for the future.
Thus passed the wild Quilava from Johto, overhunted like so many others.