Lord British and Clainin cast the "Virtue Ritual", which created Tram, and fled to it after the Trinsic Invasion, leaving Felucca to the rule of Minax.
Council of Mages splintered off from Lord British because they became disillusioned with him after the forced retreat, they no longer saw Lord British as fit to rule, and they wanted a person who could not only take back Felucca, but also keep the peace. Thus, they began gathering the components required to summon the "Stranger from Another World" (The Avatar).
The Shadowlords Faction splintered off from Minax because they believed Minax was nothing more than a magical tool, a weapon. They believed that only the Shadowlords would be fit to rule Sosaria, so they began attempting to free them from the Void.
Awhile back i posted the full history and lore of the factions, but right now i'm just too damn tired to bother with it.
So, Felucca is actually currently the domain of Minax (In terms of lore), the only thing that keeps her from penetrating the "Virtue Barrier" around Trammel is that she can't concentrate fully on it because of all the fighting with the other factions.
