Both metaphorically and in truth, the Empire is the most stable piece of civilization remaining from the previous Age. The Mountains of Sorrow protect the Empire from the destruction of the Shambles, and the Empire has flourished in a time when civilization has otherwise been near extinction.
The caverns of the Empire ring with the constant sound of the Forges. Dwarven slaves mine ore from the mountains, work it, and craft items beyond the ability of any craftsman, excepting maybe those on Thonk. Illumination comes from the fires of the Forges and the lanterns, torches, and other lights visitors and guests without the ability to see in the dark require.
The age old dwarven construction holds up, so the dark elves have seen little reason to strike it down and rebuild it. They have, however, over the centuries covered the buildings with etching of their flowing art and knot-work. Much of these etchings glow with the magic of wards or other spells, and are entrancing to people who live on the surface and are unaccustomed to obvious magical effects.
The Arcanium is both the scholarly school of magic for the Empire and the governmental body that presides over the Empire. The Orbis is the ruling council atop the Arcanium, and the Magisters atop the Arcanium have the ultimate authority in the land.
The Magisters spend most of their time involved in their own personal studies, and give little thought to the running of the Empire. To "wake a Magister" for a judgment or ruling is a decidedly desperate act that usually results in little satisfaction and much death.
All dark elves are citizens of the Empire, and they all receive full protection and property rights. Those outsiders who are admitted to the Arcanium are also citizens, though they cannot rise to the level of Magister, and their protections and rights are limited. For example, they cannot outright own businesses or buildings in the Empire. Those outsiders who are not in the Arcanium have even few rights, but they are accepted and tolerated. Some can even manipulate the rules and provide useful enough to run a business in truth, even if the paperwork shows something else.
Below all of these stand the dwarves. They are slaves, and are treated as such. Those who are valuable, trained smiths are treated well and allowed full beards. Most exist to do menial labor day and night under the watchful eye of dark elf masters and are not allowed beards. Those who cause trouble are quickly killed.
Outside of the capital city of Valine, formerly the dwarven city of Barazir, there are a number of other smaller cities and dark elven outposts. The Magisters handpick members of the Arcanium to go and preside over these as Prefects. The Prefects have ultimate authority in their location, and only consult the Arcanium on matters of great import. Consulting the Arcanium is seen as weakness, but making the wrong decisions is seen much worse.
One of the Magisters, Anthir, spent much of his career studying and exploring demons and the Nether realm. He has learned much of value about evil outsiders, their powers, and their uses. He has also learned they can be much more devious than mortals. Anthir made a bad deal, he knows now. He gained eternal life, but he is slowly losing himself. A demon seed was planted in his left hand, and a demon is slowly growing in him. Once the demon is full grown it will entirely possess his body, and his spirit will be destroyed.
Anthir is doing his best to make amends for the evil he has wrought in the world. He sees no hope for his current situation, and is facing his death with nobility, or as best he can muster it. He has a plan for freeing a large number of dwarven slaves. Once of his former apprentices, a vile female dark elf named Tatanye, runs the far away outpost of Erest. He wants to assassinate Tatanye and replace her with another Prefect who is sympathetic to the slaves. Then he can shuttle slaves to Erest where the new Prefect can free them. He now seeks a plausible way to assassinate Tatanye.
The dark elves who live in the Empire are all comfortable with magic. They must be, for their society is built upon it. These elves all have some form of arcane ability, and the further study of magic is not only not disdained, but it is encouraged. Though most cannot qualify for entrance into the Arcanium.
The rest gain positions of power as befits their abilities. Those who are particularly cruel find themselves as the slave masters and watch over the working dwarves.
Those of other races have become more common in the Empire as of late. Magic-users in Vernlarum have become tired of ostracization for acts they couldn't have committed, and they are coming to Valine to learn and be free to experiment.
Others come because they tire of life in the Wastes and believe the Empire will be less harsh. These refugees must be careful. If they cannot afford to live in the Empire and find some means of being productive, they might find themselves indentured and in slavery amongst dwarves. The threat of possible slavery keeps the influx of refugees from becoming too large.
Because of Thonk's recent aggression and possession of burst powder weapons, gnomes are an increasingly sought after commodity, and some dark elf Reclamation teams have been retested from finding lost dwarves to finding gnomes and returning them to the Empire to teach the secret of burst powder. None of the gnomes yet captured has known the secrets, but the dark elves believe it is merely a matter of time.
Unlike anywhere else in Vernlarum, magic is accepted and cherished in the Empire. Foreign magic users find the ability to cast spells almost intoxicating after a lifetime of secrecy and fear. Some magic-users come to Valine, knowing about the slavery and choosing to close their eyes to it. These people wish to learn, and hope they can leave before the Empire has tainted them too much. Much more frequent are those magic-users who preach the benefits of slavery or don't care about the plight of the dwarves.
Over the years, this is making the Arcanium a source of dark magics and evil magic-users. Those who wish to leave untainted often find themselves, at first, agreeing with evil acts to fit in and then slowly giving in to dark temptations themselves.
Gaining entrance into the Arcanium, the Imperial wizard college, is extraordinarily difficult and competitive, with it being common enough for rivals to attempt assassination against each other to improve their odds.
Those of other races who gain entrance find themselves alone in a sea of dark elves who remember childhood friends who weren't admitted to the wizard college for "these outsiders". Over time, some of the outsider mages fit in, others leave, and others simply disappear. As a mage demonstrates his ability and control over magic, he is given further freedom and more difficult tasks. Usually these tasks are directed by those above them to aid the more powerful mages in their own research. Only the Magisters themselves have full control over their time and research. Almost everyone who enters the Arcanium dreams of the day she ascends to the very top of the ranks and can not only pursue her own goals but ale direct others to aid her in her research.
The Arcanium itself is the only building in Valine the dark elves constructed. It is a dark black tower that twists and thins as it rises up out of the ground until ascends to almost the ceiling of the vast caverns at a point. Magical energy is palpable outside of the Arcanium, and oft time energy can be see swirling up and around the black tower.
The Empire has poor diplomatic relations with all of the Shambles except Mandith. Mandith comes close enough to Valine to trade, and the dark elves will trade their dwarven forged items for the bone work art Mandith's artisans create. This does not make them allies; the city and the Empire are tolerant of each other.
The dark elves detest Thonk and the masters there. The fact that the Thonkians can create burst powder weapons when they cannot only heightens the antagonism between the two. Thonk also harbors a large number of former slaves, and Reclamation teams make regular raids against Thonk to take back what they consider to be their property. Recently, the Arcanium has been providing magical support to the Reclamation teams to counteract the power of the burst powder weapons.