Hokay, I hope I haven't made a chaotic mess of things. xD
Essentially, the Pirates believe the evil Dragon summoned the Pirates in order to escape its own imprisonment. The Pirates -- hoping to get home again -- released the Dragon from its prison. The Dragon's release caused the eternal darkness and the dangerous chaos that rules the world now. The Pirates eventually managed to imprison the Dragon again using the Lanterns, but that didn't bring the sunlight back.
The Kith believe that the Dragon had always been free and benevolent, and the sun shone and everything was awesome under the Dragon's rule. Then the Pirates showed up, greedy for magic power, and trapped the Dragon in the Lanterns hoping to harness the power for themselves. This act caused the sky to turn dark forever, and the removal of the Dragon began the world's sink into chaos.
So the question now is: WHO IS RIGHT? ;)