First off, I think a look at the Intro text is needed.

"The world of Terra is slowly falling into chaos. The Valganis Royal Family have ruled over Terra for the past five hundred years. But an evil seed of corruption has been planted. A powerful malevolent force grows within the walls of The Valganis Imperial Castle. Legend has it, that the Gods of Caelum keep watch over Terra. And when Terra is in need, the Gods wake their soldiers from an eternal slumber. And send them to Terra, to reset the balance of the world. We call these soldiers.... Descendants..."

So let's run through the paragraph and cover as much as I can. First thing is Terra, the setting for the game. It's the world. Just like Earth is our world. The Valganis Royal Family is the ruling party of Terra, they are the main threat in the story as of the current patch. They also are responsible for the death of Leons' parents. Leons' unnamed parents were publicly executed for not agreeing to Valganis' terms. Moving on, you have this seed of corruption. It is most likely what is causing the Scaava to be more hostile than normal and causing the dangerous creatures in the Wilderness to be more hostile. And it appears that the Valganis Family is the source of all of this in some un-explained way. Next the game speaks of Caelum which I believe is a magical land that the inhabitants of Terra cannot travel to. The game isn't really that clear about that. The Gods have sent Alexis, one of the Descendants, to help sort out the corruption. After impact Alexis lost his memory which is driving him north to regain said memories. It is something to note that Leon has a bow that is identical in style to Alexis' sword at his house. This plus something the dwarf outside of 'The Black Anvil' says, pointing to an interesting thing. Leons' parents, and most likely Edwin too, are over a hundred years old. So it is very much possible that this bow could belong Leons' father, but there is no more information currently. That is all for this beginning part, more to come down below.

Starting the game off you see Alexis falling from the sky in a crystal, possibly the same crystals used for saving the game. Upon hitting the ground he loses most of his memory, only remembering his name and that the sword next to him belongs to him. After meeting Leon, they set off toward the mainland, meeting a few Scaava along the way. Upon finding the first save crystal the Goddess Elysia, I'm assuming that its a Goddess at least, tells Alexis that he needs to go to 'The Chamber of Memories' so that he can regain his memories. Once on the mainland, they find North Willow. After "recruiting" Brom, Tybalt, and Frann; the party sets off toward Kiln.

Leon is the son of two unnamed parents. He also has what is believed to be a little brother, Sonny, and an uncle, Captain Edwin. His parents were executed for refusing the orders of Lord Valganis and Sonny was killed in cold blood by Captain Felle of the Valganis Imperial Army. A few bits of dialogue reveal that his parents and Edwin are most likely over a hundred years old. After Sonny's death, Leon left North Willow and went to live in the Floating Forest. One day while fishing he meets Alexis, who is out cold on the ground. Leon takes him back to his hut, then they set off for the mainland of the Northern Continent. Once there Leon grudgingly reunites with Edwin, who is currently Captain of the Willow Guard. After about two days Leon and Alexis have gathered three companions; Brom, Tybalt, and Frann. All five of them set out toward Kiln in hopes to gather support to take back Seng Port.

Brom is a Guardsman of The Willow Guard and accompanied Leons' parents to the meeting with Lord Valganis. It took a turn for the worst and 'Somehow' Brom managed to 'drag' his way back to North Willow. He wants revenge on Valganis for what he's done so he joins up with Alexis as they go about and do things.

Tybalt is a Bandit that Alexis and the party find in the bandit camp while looking for the supply caravan. He attacks Alexis, Leon, and Brom with the notion that they are Valganis soldiers because Valganis' troops recently killed eight of his men. After defeating Tybalt, Alexis takes him to the Barracks where he is locked up. After waking up Alexis, Brom, and Leon question him for a bit about what's been going on. During the conversation Tybalt explains what happened to the caravan and his men and what happened to Seng Port then joins the party because he wants to give Valganis what he deserves.

Frann is a Witch that belongs to the Sol Guild and she is extremely concerned for the Grand Witch who is missing. She claims that there has been some weird writings and that there have been meetings after dark, which is extremely weird. After Alexis, Leon, Brom, and Tybalt intrude into her house they have a bit of a conversation. When Brom says that their main priority is taking back Seng Port, Frann goes all quiet and says that her father lives in Seng Port. So she immediately wants to go with them. After joining the group, the party sets off toward Kiln.

So far it is only known that he is the 'master' of the Scaava and that he gave some power to a Scaava called Lord Salron with the intention to kill Alexis and Leon. Why he did this is most likely because the master may be the source of the corruption or he is corrupted. It is also noted that this 'Great One', as Lord Salron calls him, Fell from the sky just like Alexis.

Edwin is the Captain of 'The Willow Guard' and is incredibly concerned for Leons safety ever since they reunited at the beginning. For being Leons' Uncle he seems very minor in the story so far.

Grenn is a Dwarven blacksmith that runs his shop out of 'The Black Anvil.' He probably works for The Willow Guard since Alexis needs a note from Captain Edwin in order for Alexis to upgrade anything.

The Mayor is a very mysterious figure that is said to never come out of his manor except for town meetings which are held once a month. A brown haired girl in the Town Center states, "I've lived in North Willow for three years and only seen him at a few times in town meetings...." So it's obvious that something's being hidden and will be revealed later. Dan (The Dev) said that he will be important later on in the game/story. More specifically, he said this, "The Mayor is a different matter, you'll meet him later. He doesn't come out very often......", and this, "Something dramatic happens in not long from the end of the beta, the Mayor will be out to help...." Those are quotes from conversations in the forums. And for those wondering, according to the quotes anyway, he Mayor is a guy.

The Grand Witch is the Head of the Sol Guild. At first you hear Frann talking about how the Grand Witch has gone missing and that meetings have been going on after dark, which is weird. After a little bit of running around Alexis ends up in the caves under North Willow. The Grand Witch has been sacrificing villagers and was going to sacrifice herself, which she does after a battle. The final Sacrifice awakens Horwroth, Devourer of Souls who is nearby.

Kev is North Willows' Baker. He is only a part of a small side quest in which you figure out that he "Sleep-eats" his doughnuts Which he apparently does often and used to do it before because he said "Not again" after being caught.

Lukas is the Clan leader of Kiln, Nothing else is known about him.

North Willow is a rather small refugee town, founded by Leons' Father, consisting of a Manor, a Barracks, a Tavern, a Blacksmith, a Bakery, a Small Shop, a Church and Cemetary, a few houses, and the Sol Guild. They have been receiving a large number of monster attacks, bandit attacks, and refugees from mostly Kelrik, the Dwarven capital. The Dwarven refugees plan to return to Kelrik in the future. Valganis soldiers also raided North Willow following the execution of Leons' Parents.

Kelrik is the Dwarven capital. After 'The Great War', quite a few Dwarves were separated from the capital and those Dwarves went to North Willow for safety. The Dwarven refugees plan to return to Kelrik as soon as The Everlasting Winter ends.

Pretty much the only way for the Northern Continent to get supplies, Seng Port is a very valuable port to the north east of North Willow that has been taken over by Valganis Soldiers. Now the entire Northern Continent is cut off.

Kiln is a tribal village that has been in a very mutual relationship with North Willow, sharing supplies and occasional troops. Alexis and his party are on their way to Kiln to rally support to take Seng Port back from Valganis.

Home to the Scaava, the forest is 'floating' above the ruins of an old city.

The Wilderness, once a thriving land, is very dangerous and full of monsters of all kinds. It is the only passage from North Willow to further north areas and has been undergoing what the Dwarves call 'The Everlasting Winter'.

The cave system under North Willow is very extensive and was used by the Grand Witch to summon Horwroth who she thought would protect the village. The Grand Witch has been luring townsfolk down into the Caves to sacrifice them for the purpose of a Sacrifical Summoning Spell performed by using Blood Magia, which is banned.

All that's known about the Scaava is that they are a racoon-like race that has lived in the Floating Forest for thousands of years and they have have an unknown master.
Not much to say about the Humans. They have been around for a while and are pretty unremarkable.
Just about nothing is known about the Elves.
The Dwarven capital is Kelrik. They went through 'The Great War' which seperated some Dwarves from Kelrik and those Dwarves went to North Willow for safety.
Like the Elves, Nothing is really known about them yet.

The Willow Guard is the town watch for North Willow and they guard the town against the many monster and bandit attacks. They are responsible for guarding North Willow and the supply runs to Seng Port which as of late have been ambushed at almost, if not, all runs. The Willow Guard is made up of all the main races and its head is Captain Edwin. Their headquarters is at the Barracks in North Willow. The Guards can be seen around North Willow and usually give some advice to Alexis.

The Valganis Royal Family is the oldest on Terra, their armies have protected Terra for centuries and they are most likely playing a huge part in this 'Corruption' that Alexis was sent to cleanse. Leon says that. "In the last 50 years they have been acting like the enemy." Valganis has been trying to demand supplies from various villages attacking the ones that don't give in to their demands. Due to this, Leons' parents were executed for the same reason. Valganis has been ambushing many Caravans under the protection of The Willow Guard. Their primary place of residence is 'Down South'.

The Sol Guild is group of girls, Witches you may call them, that practice Sol Magia in their 'base' in North Willow. They get their strength from the sun, hence the name Sol. They don't allow visiters unless they are accompanied by a member. The Grand Witch, Who is their leader, has gone missing recently and is found to be summoning a demon known as Horwroth into the world in the cave system under North Willow.

The bandits have are enemies of everyone and everyone is their enemy. They have been looting North Willow and ambushing some supply caravans. They have to fight the various towns that they have been looting, Valganis, and the wild creatures. They are rather resourceful and have survived against all odds. Tybalt, one of the bandits, is unknown whether or not he has any power amung them but he does say that some of his men were killed by Valganis Troops. Their base camp is the Bandit Camp.

Not much is known about The Great War other than that is was a war that separated some dwarves from Kelrik, the Dwarven capital. The seperated Dwarves went to North Willow for safety. It was immediatly followed up by The Everlasting Winter.

The Everlasting Winter, also called The Great Winter of The North, has lasted for well over a hundred years immediatly followed up the Great War turning the once thriving Wilderness lands into a huge icy expanse. The Dwarves don't have a problem with the cold of a normal winter, but this winter is different.

Nothing at all is known about Elysia or any other Gods. All we know is that Elysia uses the save crystal to contact Alexis. Elysia points him towards 'The Chamber of Memories' so that he can remember. It is unknown whether Elysia is even a god, but I'd say he/she/it (don't know) most likely is.

There is a statue in North Willow, right outsie the manor, that was built by the founders in memory of the Felgan 'BearKin'. It is believed that he is still out there, Travelling alone.....
More recent discorvery I have found is that there is a Felgan statue on top of the the Temple in the Floating Ruins. Not entirely sure what it means but it is identical to the BearKin Statue.
In the fishermans house Alexis will find a guy talking about someone named Fratus Gabriele. He talks about him and the last painting he painted which is hanging in the house. The Fisherman said that he had painted it the day before he disappeared. "Legend has it that he's still out there somewhere, driven mad by his desire for perfection. This is actually a real person who does pixel art for a living, I believe. You can look him up and see.