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During the reign of emperor Friedrich III, an Imperial starship patrolling deep in frontier space was attacked and destroyed by an unknown assailant. Before it was destroyed, the imperial shit sent out a recording of its fate, prompting a frenzied effort in the empire to discover the identity of its attacker.
Meanwhile, the Free Planets Alliance had been preparing for this day since its founding, and had pursued an aggressive policy of expansion and militarization in anticipation of an inevitable armed conflict with the Empire. Upon discovering records of Arle Heinessen's Exodus from Altair VII, the Empire realized the truth and promptly categorized the Alliance as a rebel force, and declared war.
A fleet was organized and dispatched from Odin to the Iserlohn Corridor with the intent of penetrating Alliance space, but the Alliance was ready for it and succeeded in fending off the invasion. This marked the beginning of the first FPA-Imperial War, which would be fought off and on for more than 150 years. (Legend of Galactic Heroes Volume 1: Dawn)
Because the Alliance viewed Rudolf von Goldenbaum as a usurper of the Galactic Federation's authority, they refused to acknowledge the Empire as a legitimate government; likewise, the Empire refused to recognize the Alliance government, referring to them in all records simply as "rebels." Because of this, direct communication between the two states was impossible. This ultimately necessitated the creation of the autonomous Dominion of Phezzan, which could function as an intermediary between the two.
At the start of the war, the Empire possessed a population far in excess of the Alliance's, but due to the severe oppression its citizen suffered under thanks to the draconian policies enacted in accordance with the Inferior Genes Exclusion Act, countless Imperial citizens fled to Alliance territory. Consisting of refugees and those seeking political asylum, the Alliance population rapidly expanded: by the end of the war the Free Planets Alliance population would be more than 2,000% greater than it had been at the beginning. This enormous surge in manpower allowed the Alliance to fight against the Empire on an even footing, even as the Empire rapidly expanded its military production. By 796 UC (487 IC / 3596 CE) the balance of power between both states would be almost evenly split. (Legend of Galactic Heroes Volume 1: Dawn)