Long ago the Dragon of Life came to this world and created life from lifelessness. Soon, however, her brother, the Dragon of Death came to feed on the life she had created and there was a great battle. Though he lost and was driven away, he planted the seeds of death, disease, and decay upon this world so that, eventually, all life would wither and die. To fight this, She went to a mountain that was destroyed in their battle and breathed upon the rocks, turning them into eggs. She left, but from these eggs hatched the dragons.
There are five types of dragons, not including the Ultimate Dragons of Life and Death. The Grand Dragons represent the four elements, Fire, Water, Earth, and Air. They are the most powerful of the dragons, but the most limited in their powers. They are immortal, never growing old but always growing, and their shape is governed by their element.
The Greater Dragons have powers that are a subset of those elements, or a combination of them. They have more fine control of their abilities, but less power. They continue to grow over their several thousand year lifespans.
The Common Dragons have combined or psychic powers. They have more control but less power than the Greater Dragons. They will grow slowly throughout their several hundred to over one thousand year lifespans.
The Lesser Dragons, often the size of horses, have more esoteric powers, but in general they are more specialized forms of powers that the other, greater, types of dragons have. They can live for several hundred years, but stop growing somewhere between 250 and 300 years of age.
Petty dragons are the size of large birds at most and have the widest selection of powers possible. They can have any of the powers of the other types, but little fine control of it. They rarely live past one hundred years of age.
All dragons can communicate through a combination of empathy and body language know as "Dragonspeak", allowing even the smallest of dragons to communicate with the others. Humans can also learn Dragonspeak, though their "accent" will make them hard to understand. They can also use the abilities of dragons either by bonding with one, becoming "Dragon-kin", or by using the Stones of dead dragons. Both methods have problems, however. Dragonstones will quickly weaken once the dragon dies, as the energy within will be used to try and revive the dragon, and must be removed quickly to preserve their power. Larger, and more powerful, stones come from larger and more powerful dragons, which makes gathering them a dangerous profession. Bonding with dragons will make a person take on features of the Dragon as well as their power, which will slowly make you an outcast from society.

The origin of the mortal races is said to have occurred when the dragons tired of fighting among themselves and wished for something to entertain them. They gave their prey the gifts of speech and intelligence and kept them as pets. Over the centuries, however, the pets grew more and more clever, devising methods of communication which relied on sound or distinct shapes instead of the Dragonspeech. Eventually the mortal races, regardless of their form, began to crave freedom. They fought back against their masters and, eventually, teamed up with those dragons which were willing to let them be free.
It has been three hundred years since the War of Freedom began, and the mortal races, thanks to their technology, have begun to see an end in sight, a world in which the mortal races and the dragons can live as equals.

A few things I forgot to clarify in the op:

1) Many people are animal people. Humans exist but are just one of the mortal races.
2) Tech is limited to iron age and some steel, but many experienced dragon fighters/ dragon-kin use dragon parts in their equipment.

Edit:

Bonding:
1) Bonding allows two beings to feel the relative strength and health of the other. It also allows one being to slowly gain a trait the other has that they see as "superior" to their own traits and that they desire. The other being, however, will not know what traits you are gaining unless you tell them, they see you using it, or they see a physical change in you. The desire may also be subconscious, such as jealousy.
2) Changes occur faster the larger you perceive the disparity to be and the more you desire it, but are limited by the physical body. Ex: You may think that Dragon wings are the best advantage ever and crave them more than anything, but it will still take your entire a lifetime or more to get them if you are human, as they are contrary to your body's physiology.
3) Traits gained through bonding are hereditary, and have a 50/50 chance of being passed on to children, assuming only one of you has the trait.
4) Bonding requires a strong emotional connection between two beings. The specific emotion doesn't matter, and can be different for each being in the bond, as long as it draws them towards each other.
5) At least one of the beings in the bond must have some degree of magical ability and control. Without ability, the bond won't form, without control, the bond will grow unstable and break.

Known methods of forming a bond:
Assuming at least one of the two has magical ability and control, and both have a strong emotional pull towards each other:
1) One being saves the life of the other.
2) One being protects another from serious harm, though not necessarily mortal harm.
3) The two beings drink a drop of each others blood (Called the Vampiric bond, and is sometime stronger than other bond forms).
4) Two beings co-mingle their blood in their bodies (the usual method is to cut yourselves in a minor way and touch the wounds.
5) Sex (requires a very powerful emotional bond. Only known to work with Lust, Love, and intense friendship which borders on love.)

I added a plot so that we will know what we are doing.

I'm going to start putting all of my updates in the High Casual version of this RP. I may continue to bump this topic, but the updates should be there if you are looking for the complete story.

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