In the Divine Divinity lore, the Source was discovered during the Age of Deception by the healer and explorer Ruganol. It allowed healers (who could mentally connect to it), to cure almost all know diseases and instantly heal the gravest of wounds. While some speculated that the Source was a minor deity, most healers believed it was and extra-dimensional field of energy.
Ruganol came to Ferol by ship during the Age of the Damned, and offered his help to Duke Dylan Ferol when the demons and wizards of the Damned were laying siege to Rivertown. When the war was won he left to teach those in other countries about the Source.
For an unknown reason, shortly before the events of Divine Divinity healers lost the ability to connect to the Source. A healing shrine in Aleroth, also connected to the Source, stopped producing healing gems. This continued through the plot of Divinity 2, as well.
In Divine Divinity a book described the recent history of Rivellon as being divided into four time periods of between four and six hundred years each: The Age of Deception, The Age of the Damned, the Renaissance and the Age of Chaos. The lizard scholar and seer Tol Dane predicted that after the Age of Chaos, when the events of Divine Divinity take place, would come a time of great troubles for the seven races, which he called The Age of Lies.
