Warhammer is just one of many games set in a fictional universe. Warhammer Gold is notable for its "dark and gritty" background world, which features a culture similar in appearance to Renaissance Germany crossed with Tolkien's Middle-earth.
The geography of the Warhammer Gold world strongly resembles that of Earth. This is said to be due to the actions of an ancient spacefaring race known as the Old Ones. This mysterious and powerful race visited the Warhammer World in the distant past. Establishing an outpost, they set about manipulating the geography and biosphere of the planet. Assisted by their Slann servants, they moved the planet's orbit closer to its sun, and arranged the continents to fit their standard geomantic template.
The Old Ones were subsequently expelled from their colony when the polar "Warp Gates" that they had created collapsed and chaos gained entry to the world. Before leaving however, they had established the Lizardman empire, and had conducted numerous genetic experiments, which had led to the races of elves, dwarfs, men, ogres and halflings.
The elves and Warhammer Gold dwarfs eventually founded empires of their own, and were initially allies. The early elven empire later splintered, with a sect of elves secretly corrupted by Chaos taking refuge in the northern lands of Naggaroth, leaving the still uncorrupted elves, or High Elves on their island home of Ulthuan. The alliance between the High Elves and the Dwarfs broke down due to the machinations of the newly formed Dark Elves, leading to the War of the Beard between the two powers. The elves who stayed behind during the waning of elvish influence in the Old World established a realm within the forests of the old world, most notably Athel Loren and became known as Wood Elves.
The men were the slowest to develop, but eventually formed several strong realms, able to resist both the forces of Chaos and the older powers. Chief amongst these are The Empire, Bretonnia, and Cathay. Nehekhara, a former empire of men to the south of the Old World, has since become undead via a curse. Its long-dead armies now march to war under command of the Tomb Kings.
The forces of evil are often depicted as not a localised threat, but a general menace. The Skaven exist in an "Under Empire" in extensive tunnels beneath the other races, while the Orcs and Goblins are nomadic, and regularly attack without warning. Chaos and the Undead also routinely infiltrate the other nations, especially the Empire.
The current Empire Army Book describes theWarhammer Gold World to be in the Year of Our Lord Sigmar 2522 although this may differ between races. A timeline in the same army book placed the Sigmarite year zero at the ascension of Sigmar to the throne of the Empire.