The fall of Tsar

"The history of Tsar is complicated" is a common phrase in history books, but it is something said by people who stand to gain from muddying the issue. This is not just a personal opinion, but rather is an important facet in decoding the history of the "slumbering city". Most history books published more than 300 years after the events of 1023E (or roughly the number of years after the event that would be sure to see the majority of the contemporary historians safely to their graves) see a sharp decline in how "complicated" the issue indeed was.
The slumbering Tsar is a blemish on the souls and reputations of all good folk who were alive at the time. The rot that ate Tsar from within had begun as early as 930E, when Tsar cut its ties to the (predominantly Torag) goblins of the Mosswood. The reasons behind that specific decision are complicated, but the most likely answer is that without trade, the goblins would be forced into a more aggressive stance with the rest of the Valley, and to eventually make the goblins of Grez's Neck their primary trading partner. This would benefit the Death's head1 priests much later, but the immediately short term it turned worried eyes away from Tsar and towards the forests.
That Tsar managed to slowly fall under the banner of Death's head over the course of nearly a century does a lot to explain why historians of the time may have felt the need to recast the situation as something complex and unknowable, even after the fact, to assuage themselves of any guilt. The only truth to that stance is that Tsar contained many good people, right until the end. The church of the Swordmaiden grew stronger as Tsar began to wind down its military and guard (for reasons that will be discussed later) and the sword-paladins took to patrolling the roads and even leading large-scale assaults on Tsar's growing lawless surrounds. Under Champion-of-blades Arlington, the church (and its following) grew to encompass one man-in-ten in the city.
Around the year 1000E, Tsar was often referred to as the "Slumbering City", and it is no surprise as to why. Under Senechal2 Lorvious, Tsar greatly reduced its trade and military power, instead focussing on expanding its infrastructure and other needs to reduce its reliance on outside forces for food and other materials. By the end, the city may not have existed at all, as there was little reason to go there, and remarkably few people chose to leave. 
While it is easy to look back and watch Tsar's slow fall from prosperous metropolis to vile cult city, it is hard to blame those in charge of protecting it. The difference between an austere and a miser is hard to spot in the moment, and likewise it can be difficult to tell between a malicious government and simply a bad one. Skor has had monarchs that were aloof, incompetent or even cruel, but the city always bounced back soon enough (even if the lower classes had to occasionally exile the odd ruler). Tsar's problem was one of popular opinion, Lorvious' austere and inward-focussed rule seemed reasonable to many of his citizens. Skor was in a bad regency, Aberdeen was embroiled in a civil war (as were the goblin tribes) and Ordheilm has just finished burning itself to the ground for the second-to-last time. It's little wonder that even as Tsar's situation grew ever more grim, few people really took notice, and even fewer tried to do anything about it.
When the Death's head army marched from their lair in the north, past Skor (augmenting their power as they did so) and arrived at Tsar, everything unfolded remarkably slowly. Lorvious addressed his people, and presented them a simple choice: Either aid the death's head, or perish. What surprised the forces of Good (and, the author suspects, Lorvious himself) is how many of the slumbering city's citizens were already part of the cult. Cults to Orcus and Tsathogga were common at the time (and indeed, are no less common today) and the Death's head cutlists had spread their number to the point where they outnumbered the followers of those above. 
What came next wasn't a bloody revolution. There was little fighting in the streets. Your neighbor may be a cultist or a sword-sister or someone just as scared as you. For most people, it was easier to put on a black robe and go on with their lives. Those with ties to the holy or something resembling a conscience tried to flee the city, but it was hard to organise and many were cut down by the cultists in their midst. Those that fled ended up in Skor (under a new and kind regent) or in a now calmer Aberdeen. Aberdeen, having lost so many farmers and workers in the previous civil war was in no position to say no to cheap labor. 
History written at the time made it sound like a matter of weeks, but it was a full seven years between Lorvious' speech, and the fall of Tsar. Seven years of the cult city closing its borders, and turning away all trade. Seven years of digging beneath Tsar, constructing the catacombs that haunts the city to this day. It took the will of Zelkor, along with Agamemnon's acumen, Estalla's strength, Arlington's faith and Marra's spirit to forge an army that could assault the city. It was a difficult choice on the parts of all involved; the cult city was doing comparatively little harm to its citizens (aside from the gross blasphemy), compared to the tidal wave of blood that would be brought about by a siege. Lorvious has many powerful names on his side, such as Jannir Pangonis and Luther Stoneheart that would ensure that the battle would not be easy.
In 1023E, the army of light broke the walls and 'saved' the city, at the cost of many thousands of lives. Tsar was burned to the ground (which, ironically was not taking the matter far enough) and the Death's head cult was routed. Those that joined the Righteous March and tried to finish the cult off once and for all perished to the man, and to this day the Valley is a lesser place than it was in the time before Lorvious took power.
The history of Tsar is dark, gruesome, bloody and profoundly disturbing, but it is not complicated. If anything, it's proof that for every man willing to pick up a sword and make the world a better place, a hundred more would prefer to shut their eyes and let events take their course.
-Loke of Ordheilm, Senseshal of Tsar, 1784E
1Old term for Orcusite. Originated in the Lower Dales, where the Church of Orcus was tightly bound to the Cult of The First Among The Dead. Their symbol was an elven head, flayed of skin except for the scalp, hanging from a hook by its hair.
2 These days we'd use the word "Mayor", but Tsar has always been governed by a trio or quartet of leaders (even to this day). Senechal or "Master of the House" was in charge of the cities' "domestic arrangements" which included overseeing matters of trade and the deployment of military forces. These days that position is held by Loke of Ordheilm, a priest of Pharasma.