Prior to the events of BlazBlue, humanity was on the verge of extinction from the "Black Beast", a creature of Darkness. The world was saved by six heroes who wielded magic. They helped humanity create "Armagus", a fusion of magic and technology, to defeat the Beast.
After the war, the Novus Orbis Librarium Armagus (the Library for short) was created to govern the world with the use of Armagus. A great deal of dissent was caused by the Library, partly due to Armagus' use in nearly every facet of society, and the widening socioeconomic gap between those who could and couldn't use Armagus. This dissent would eventually form years later into The Ikaruga Civil War, when the Ikaruga Union openly rebelled against the Library. After the war, the Library imposed a harsher rule on the world, punishing any rebellion against the Library with the death penalty.
On December A.D. 2199, several years after the Ikaruga Civil War, a branch of the Library was utterly destroyed by an SS-class traitor named "Ragna the Bloodedge" also known as "The God of Death", in an attempt to destroy the entire Library. The Novus Orbis Librarium Armagus, hoping to stop him, immediately put the largest bounty ever for anyone who could capture him. Interestingly, Ragna possessed a powerful form of Armagus known as the "Azure Grimoire" (Grimoire of the Blue in Japan), also known as the BlazBlue. This led to the Librarium, as well as the Ikaruga Union and other fighters, to be after not just his bounty, but also his grimoire.