There was some disagreement over whether the game world came from the "lore" or vice versa. I did some online research and it turns out that the first Elder Scrolls game, "Elder Scrolls Arena" which was released in 1994 had no "lore" books as they have come to be known. The game world, as a matter of historic record, existed before "the lore." The "lore" was added later and is therefore an outgrowth of the game world and not the other way around.

Read about it here:

http://elderscrolls.wikia.com/wiki/The_Elder_Scrolls:_Arena

I was under the impression that this was common knowledge.
The lore of the original Elder Scrolls was pretty barebones and was only fleshed out by the time of Daggerfall, and even more in Morrowind and continues to grow and change with each new game, including the spinoffs. "Lore," which includes the "world" had always existed, it just evolved over time.

Arena wasn't even originally going to be an RPG. It was a gladiatorial fighting game, that then got some light RPG features and a few questing opportunities. Over time, the RPG features and questing got more and more attention, until the gladiatorial fighting aspect was dropped completely in favor of only RPG-style questing. As Arena's development started finishing up, they had people write books to flesh out the setting, which then appeared with Daggerfall.