The game takes place in Cairn, a dark, war-torn world where a once proud empire has been brought to ruin and the human race driven to the edge of extinction. Cairn has become ground zero of an eternal war between two otherworldly powers, the Aetherials and Chthonians, one seeking to use human bodies as a resource, the other intent upon destroying the human race before that can happen.
Humans had come into communication with extra-dimensional beings. They learned things from the whisperings of these otherworldly entities and eventually attempted to open a portal to bring one across. Naturally, being paranoid of the unknown as humans often are, they also devised a way to imprison it once it came through. Through experimentation, they learned that these beings, made of aether, a sort of spiritual energy, could fuse themselves with the human mind, possessing and controlling their host if they were able to subvert the human's will. The researchers discovered that a human, once possessed, retained heightened abilities after the aetherial being was purged from them. Naturally, this research got out of control as such things always do. The researchers brought over more aetherials, they got loose, the aetherials were able to then open more portals into their own world, bringing over large numbers of their brethren.
With them they brought aetherial obelisks. Such an obelisk is an abomination formed out of earth and the flesh of unlucky creatures absorbed into it. At its core is a giant crystal imbued with vast aetherial energy. The purpose of the obelisk is to transform portions of the world to be more suitable for aetherial habitation.
While the Aetherials are seeking to use human bodies as a resource, the Chthonians appeared to destroy the human race before that could happen. This cataclysmic war has not only decimated human civilization but is warping the very fabric of reality and, in its wake, giving life to new horrors. The warp is the result of aetherial energy seeping into the human plane of existence. The Aetherials have the ability to manipulate this energy but, untamed, it can spread like fire, feeding off the material world and growing in intensity. It is hazardous to living creatures, similar to fire or radiation and prolonged exposure to small doses can alter and distort living things.
The world can never be fully restored to the way it once was. Grim Dawn is about survival and adaptation to the grim new reality. Individual survival and the collective survival of what remains of humanity. Small enclaves of human survivors exist scattered throughout the world, holed up in hidden refuges. These humans have quietly watched the warring invaders destroy one another and have become wise to the strengths and vulnerabilities of their otherworldly foes. A few survivors have begun to exhibit strange new abilities after surviving possession or exposure to the warp. These unnatural powers are feared by some but give many new hope of launching a resistance to fight the "outsiders" and reclaim what's left of their world.
A lot of details about the events that lead up to the current conditions of the world will be conveyed in scraps of writing that the player character (PC) can find. One of the main sources of information are pages from the "Journal of Constable Creed." Creed worked as an imperial intelligence agent but ended up catching on to things he wasn't supposed to know. He quickly finds himself transferred out of the capital city with a non-negotiable "promotion" to constable of a quiet backwater town. While there, Creed starts to take notice of various "strange happenings" that are sort of precursors to the cataclysmic event which brings the world to its current state of being and clues to the insidious plot that brought it all about.
Devil's Crossing Prison will be the start of the game. Human survivors have taken up refuge behind the thick walls and iron bars of the prison. The iron bars help keep out Aetherials. The cliff walls surrounding the plateau also make for a highly defensible location, so it was a natural choice for refugees of the nearby Burrwitch Village to try and hold out. This is a town you will frequently return to and it will contain memorable NPCs.