The Time of Troubles, also known as the Godswar, began during the Year of Shadows, 1358 DR. The Godswar is a cataclysmic period during which the gods of Faerûn are forced to walk the earth in their mortal avatar forms. However, unlike when a god usually sends an avatar, and its true form resides on one of the Outer Planes, all gods were demoted, leaving them vulnerable.
The Godswar was precipitated by an attempt by two deities, Bane and Myrkul, to steal the Tablets of Fate from the overgod Ao. The tablets were created by Ao and delineated the areas of responsibilities given to each deity: his or her “portfolio” over which each of the gods of the Faerun have domain. Angry with the gods for their habitual pursuit of power and negligence toward their mortal faithful, the theft of the Tablets resulted in Ao banishing all of the gods save Helm (selected to protect the gates to the heavens) to take on avatars and live as mortals.
Originally thinking that this would cause the gods to rededicate themselves to their portfolios, Ao watched in consternation as it instead caused a number of mortals to make a bid for their divine power, gods to war against each other for dominance over portfolios and worshippers or to settle old scores, and the world to be reshaped in the wake of their struggles.
One of the immediate effects was that clerical magic suddenly ceased to work unless you were with a few miles of your chosen deity. This had a devastating effect on the forces of good, and allowed evil an upper hand across the world in the age-old battle of the light vs. the dark. As the centuries past, most gods have found a way around this restriction, disseminating their power among their followers in a variety of ways.
The second effect was that, for a short time, arcane magic became unstable…however this condition righted itself within a matter of weeks.
After 500 years, the Godswar has taken its toll on the political, physical, magical and religious landscape of Dark Faerun, and even a number of the gods themselves have changed as a result.