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In my campaign, Cauldron is located at the frontier between Darguun and the Mournlands, so I had to invent a reason, why there should be a gnome enclave at all, being known that gnomes prefer to live in Zhilargo. Here is what I thought of:
When the Dragonmarked Houses launched the War of the Mark around 1500, it soon became clear, that this war wasn't about the aberrant marks only, but also about economical power. The gnomes of Zhilargo with their thirst for knowledge for its own sake shouldn't have been involved at all. But there were a group of gnomes at Korranberg, which tried to work with the knowledge they gathered, including the creation of magical items and of mechanical automata. Realizing that this would arise the opposition of the House of Cannith they decided to leave Zhilargo to protect their gnomish brethren. They found refuge in the inner bowl of an dormant volcano where they built the city of Cauldron. An artificer named Jzadirune went further and carved out an enclave for himself and his family, which was named after himself.. There they went forgotten, investigating and creating magical items which they stored, hoping to make a bargain in future time.
This time began in the year 30 YK, when Cauldron was discovered by an royal expedition sent out by Galifar I., who soon realized what a treasure he had found there. Under his protection the gnomes of Jzadirune reached an agreement with the House of Cannith to be allowed to further item creation in exchange for a great part of the knowledge they had gathered since their exodus out of Zhilargo.
All went well, until in 894 YK King Jaroth died and the five nations split. Cauldron belonged to Cyre at this time; Cyre gained exklusive access to the items created in Jzadirune, thus becoming a major threat to the other kingdoms. But they never trusted the gnomes which had developed good contacts to their Zhilargian relatives and wished to stay neutral in this conflict. The House of Cannith took the chance to get rid of an competitor and encouraged the mistrust growing in the Cyran Rulers.
It was in 918 YK when unknown saboteurs destroyed the Glass Tower of Sharn. This event was so dominating in the worldwide reception that another accident found nearly to none attention. A strange magical disease, called The Vanishing, killed some of the gnomes of Jzadirune and forced the survivors to evade from the enclave. No one knows what caused this plague; But it seems that Cyre wasn't to eager to help finding a remedy. Rumors spread that Cyre wanted to suppress the gnomish wish for neutrality, and learning that gnomes can be as bullheaded as dwarves, found a cure to teach those obstinate creatures a lesson in obedience.
Although no prove can be found that those rumors were right, scholars believe that this accident was one of the reasons, which made the Gnomes of Zhilargo to give up their neutrality and to ally with Breland in 962 YK. And when the Last War ended, Cyre had been destroyed and it seems impossible to further investigate the cause.
But there exists another rumor... one that could threaten the honor and might of the House of Cannith and, if proven to be true, could even lead to another War of the Mark. Some people (mostly gnomes) think that it actually was the House of Cannith trying to profit from the Cyre-Jzadirune alienation. And when the results of this alienation were to meager, they used their knowledge about the gnomish achievements to develop a magical weapon which brought destruction to their competitors.
(Sources: Eberron Campaign Setting – articles about Breland, Zhilargo, and the History of Eberron;
Dungeon Magazine #97 – Life's Bazaar, pg. 45 Cauldron and pg.58 f. Vanishing in Jzadirune )
As ever, comments and corrections are really appreciated.
Yours truly,
Wormy
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I'm glad that you like it and find it useful :) I try to get as much Eberron background history into the AP as possible,since my Players don't know the setting and I want to transfer the special athmosphere into the adventure path. And when they reach Cauldron, they will have gone through the "Forgotten Forge" and "Shadows of the last War" so they already will have established a (friendly) connection to the House Cannith; I hope they'll find those rumors disturbing enough to investigate this matter. I'm not quite sure who will be the Bad Guy in he end, but I plan to offer them a solution to this riddle.
Yours, Wormy