In this primordial chaos the spirits became afraid. They knew they could die at any time, and in this fear of death the most powerful spirit in the universe decided to save us. He named himself Time and forced himself onto the universe. He invented Immortality, and was praised by all.
This came at a price. The peace of the chaos was broken, as spirits lived long enough to form grudges and become greedy. The most powerful spirits formed empires that squabbled with each other. Time managed to conquer the light, and turned his eyes to the spirits of darkness.
The most wretched and foul of the spirits of darkness hated how Time could bring peace to the universe, and formed a plot. He told Time that by comining the light and the darkness into a new realm, they could harness both and become the masters of reality. Time was swayed, and the spirits of light decided to create Nirn. We spirits of darkness tried to warn Time, but he refused to believe us, claiming that we were trying to stop him from conquering us, and so we refused to help him.
The king of darkness imprisoned Time in this realm. Half of the spirits of light escaped, but the other half were trapped along with their master. Time destroyed the king of darkness, but he laughed, for he had created the worst of all possible worlds. In it, spirits were mortal like in the before times, and fought eachother like in the present. The spirits of light were doomed to live in a world of suffering, death and strife for the rest of eternity. Thus was happiness destroyed in the universe.
You mortals who recoil in shock and horror at our lords, who see monstrous evils ruling over Oblivion, know this. Of all the suffering we Daedra have endured and caused, none of it compares to the horror of your world.
-The Storm Atronach Ixius Zuus, College of Whispers Daedric Interrogation, Ninth of Frostfall 4E 385