This thread is a bit old, but the answers are worth answering ... for everyone^^.
1) No, not a retcon. D:OS2 plays before Divinity 2. Damian was banished to Nemesis, but nobody knows this at the moment. The Black Ring thinks their god is dead, so they looked for another and found the God King.
2) Damian is the Damned One, the reincarnated God of Demons. Like I said, he was banished and everyone thinks he's death. I guess the next will finally be about the last fight between him and Lucian (and about Redemption, since both did a looot of stupid things the last hundred years).
3) Jupp. He's just a big bad archdemon. They tend to do their own stuff and since Damian isn't there to boss him around, I guess he thought he could get away with it.
4) Don't know either. I guess Braccus breaking away from her costs her some energy?
5) Lucian tells you, that the Black Ring was winning and he saw Deathfog as the only way to win the war. That's why he sacrificed his elven allies and the whole mess started, since Tir-Cendelius lost his followers and the Voidwoken could invade Rivellon.
6) Honestly, they were doing and I think they wanted to absorb what was left you, so they could at least have some source to work with. They were desperate and as good as dead, when you arrived.
7) They retconned it a bit: now there were Divine's before and the Council of Seven was the place were they were created. This happened in the first Divinity, but now we have a real island to work with.
8) Source is the stuff, that creation is made off. It's basically your soul. They are hungry and they need it to survive, since they basically are just very hungry ghosts, that may have originated from the Hall of Echoes.
9) Sourcerers are people who can use source, godwoken are people who are able to get possessed by your god. Since mortals seem to be only weaker copies of their gods, who get auto-cannibalised by them, it makes sense I guess^^.
10) I guess the God King also sealed his memory away or being so weak (read: without source to feast) destroyed also a lot of his memory. I'm not sure either.
11) Braccus Rex was the greatest Sourcerer of all time and knew maybe more about it than, well, everyone. Lucian and Dallis used a lot of his older stuff (like the wands and creating monsters), so having the guy who designed everything seemed to be useful. He's just a very powerful undead sorcerer. And a dick. The biggest dick of the series.
12) Lucian needed to hide himself from the gods, so they didn't pursue him. The Divine Order was a tool of the Seven after all. Same goes for the Voidwoken, who may saw him as a big four star - dinner (and would have sucked him dry, let's be honest).
I think most of the rewrites go into Act 3, so I hope all will be a bit clearer
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