The Cataclysm is the name given to the destructive event that occurred about 200 years before the end of the Third Age. Due to a combination of circumstances (the invasion of Noefra by the Nameless and his army of monsters as well as the improper activation of the Left Eye), a planar realignment occurred, threatening to destroy the entire Dream. This ended when the Great Mechanism took back the power of the Old Gods (depowering and effectively killing them) and used that mass of anima to stabilize the planes.
As a result of this planar realignment and the massive consumption of anima, all magic ceased function for nearly 50 years (in Noefra, less in other places) and the land was jumbled. Whole nations (including the Flower Kingdom were swallowed by the waves; many refugees had to flee. Overall, it is estimated that nearly 70% of the population of Noefra died during those 50 years (10-40% of the population on other continents) due to starvation, war, and natural disasters of all types.