Great Calamity

The Great Calamity (大災厄 Daisaiyaku) is the name given to the series of events occurring approximately 400 years before Natsuki Subaru's arrival in the new world, where the Witch of Envy first appears. After untold casualties and destruction, a group, composed of the Sage, his apprentice, the First Sword Saint, and the Dragon Volcanica set forth to end the Witch of Envy's rampage. In the end, the Witch was sealed in eastern Lugnica. It is the paramount event in the Re:Zero world.

Background
The nine Witches of Sin known today were not always witches, as there have been many others in the past, of which there is very little information about. The witch genes that grant the witches their authorities are inherited, and as always, inherited abilities require some degree of compatibility with the user to ensure control over their powers. Unfortunately, there came a day when a young half-elf named Satella decided to adopt the witch genes of envy of which she was horribly incompatible. As a result, she developed a separate personality as an extension of her authority - the Witch of Envy. Satella attempted to maintain control over her authority, and for a while she did. In that time she made friends with the other witches, with the exception of the Witch of Greed.

Eventually though, the Witch of Envy overtook Satella and began to lash out, beginning the Great Calamity.

Calamitous Event of Great Proportions
According to records around the time, the Witch of Envy began her rampage by attacking local towns and villages, and then cities, then nearby regions, nations, and soon enough, her rampage had flattened, salted, and scorched entire continents. Naturally, destroying the world did not contribute to Satella and the Witch's reputation, and her name would forever be remembered as the ultimate evil in the world. It is hard to grasp the scale of the destruction, though a good try would be to say it is because there was nothing left to compare the old and the new world to.

Eventually, a group of heroes, not wishing to see the world end, took up the cause to end Satella's reign of destruction once and for all. The heroes, who may or may not have been exclusively Lugnican but ended up associated with the Kingdom anyways, were the Sage, Flugel, his apprentice, Shaula, the first Sword Saint, Reid Astrea, and the Dragon, Volcanica. With their powers combined, they still failed to kill Satella, instead resolving to seal her in the Evil Sealing Stone Shrine within the vast Augria Sand Dunes in the Eastern Desert regions of Lugnica. Satella, virtually immortal, would stay an ever present threat to the world. Foreseeing a possible scenario, the Pleiades Watchtower was constructed to watch over the entire region to make sure nobody would get remotely close to the location of the sealed witch.

Consequences
With their reputations (and half the world) destroyed, the survivors of the world took to hunting down the Witches of Sin, who were all considered dangerous and nuisances anyways. As the witches were whittled down and slaughtered by just about every remaining power in the world, the Witch of Greed took the initiative to collect their souls. She then created a sanctuary, the Sanctuary, to protect herself from the Dragon Volcanica hunting her, as well as the Warlock of Melancholy, also hunting her. Volcanica sealed the Witch of Greed in the Sanctuary where she would die young, and her body and soul would remain there for always and always. Eventually, Demi-human refugees found their way there, in a way reviving the Sanctuary's purpose. Ironically, it was the after effects of the Great Calamity, the fear and mistrust generated mutually between Demi-humans and Humans that would lead to the war that would push them into Sanctuary.

A religious organization seeking to redeem the Witch of Envy's name, the Witch Cult, would be founded several hundred years after the Great Calamity. Composed of the Sin Archbishops, individuals who'd all inherited the witch genes of the deceased witches, as well as their many, many branch and umbrella organizations and followers, every cultist were to be guided by Gospels, incomplete and often vague copies of the two complete Books of Wisdom created by the Witch of Greed (of all people) granted to Roswaal J Mathers and Beatrice. Though the Witch of Envy isn't actually dead, a stated goal by the Witch Cult is to revive the Witch.

The Sage, arguably the most important figure of the whole ordeal, besides the obvious, decided against taking recognition, granting his achievements to his apprentice and the other members of the group. Though some do believe the Sage had no part in the Great Calamity, it is clear that in Lugnica at least, the Sage is very much recognized for his contribution to saving the world.