Bugs worshipped the Old Light, but another, Pale Light appeared in the world. It is said that once a Great Wyrm came to the kingdom to die and by dying, it took the form of the Pale King. He founded the Kingdom of Hallownest and granted consciousness to its people. The bugs forsook the light that spawned them and slowly forgot it.
The memories of this ancient light lingered still, hush whispers of faith... Until all of Hallownest began to dream of that forgotten light, calling out to them. To combat this, the Pale King sought to seal away the Old Light. He began running experiments using black Void from the depths of the Kingdom to create a Vessel for it.
After hundreds, if not thousands of failed attempts, the Pale King finally deemed The Hollow Knight worthy of being the Vessel capable of containing the Radiance. The door to the Abyss has been sealed:
"Higher beings, these words are for you alone. Our pure Vessel has ascended.
Beyond lies only the refuse and regret of its creation. We shall enter that place no longer."
The pure vessel, the Hollow Knight was sealed within the Temple of the Black Egg with the help of three powerful bugs, resting in permanent sleep to protect the seals and the Kingdom. Monomon the Teacher, Lurien the Watcher, and Herrah the Beast, became known as the Dreamers.
With the Radiance sealed, Hallownest continued thriving for a time, however soon it was clear that the Vessel was afterall not pure and an infection started leaking from the Black Egg, reverting bugs back to a primal, naturally aggressive state, driven only by instincts.
The Pale King and the entire White Palace disappeared, leaving behind only the outskirts of the castle and a single Kingsmould. Without their King to guide them, Hallownest slowly fell to ruin as more and more bugs became infected. Now the only inhabitants have either gone insane from isolation, or became husks driven to fight against anything not infected.
For more information on the different areas in Hallownest, see Areas.