The last stronghold of the Royalist forces sits in the middle of the continent of Khorvaire, where is was hemmed in, and slowly strangled by the Populist forces of the other nations. More cynical parts of the population would occasionally (but quietly) note that Cyre could have been crushed at any time by the combined forces of the Five Nations, and that The War dragged on for years longer than was necessary.
Only The Event ended the war, and made Cyre into the dead, empty place that it is today. The Mistwall surrounds Cyre, to varying thickness, concealing the lands beyond. At some times it is known to be almost thin enough to see through, but in general it’s thickness varies, according to no known natural law.
Before the rising of Populism, Cyre was the Jewel of Khorvaire, with the center of government at the center of the continent. It’s generally open-handed monarchy allowed the principalities of the surrounding states to develop on their own, and it was this benign neglect that allowed the Houses to gain as much power as they did, and destroy the throne.
As the war slowly encroached on the traditional bounds of the nation thorpes and towns were captured. Very meticulously, the Houses pushed back the borders of monarchy, consolodating their hold, and installing machines in every population center.