The Background Story, as given in the Soul Reaver Game Manual (UK and US versions), suggests that the Council - as a ruling body - was formed after 'humanity had been thoroughly domesticated'. Prior to that, the lieutenants had been focussing on the conquest of Nosgoth in Kain's name; building their clans and destroying the 'major human Kingdoms'.
With the conquest complete, Kain and his lieutenants began 'shaping Nosgoth to [their] will', having slaves construct the Sanctuary of the Clans around the Pillars, and building huge furnaces 'to belch smoke into the sky, shielding the land from the poisonous effects of the sun'. The formation of the Council was likely done to formalise the changing role of the lieutenants: from warriors to overlords.
Over time, the Council 'became bored'. As Raziel described in the Background Story: 'We allowed the remains of the legions, the lesser vampires, to have their intrigues. They provided amusement and spice to an increasingly uninspired court. As faction fell against faction we bet upon the outcome. We helped and foiled plots at our whim'.
The Soul Reaver opening FMV (Full Motion Video) showed the Council - missing Raziel, who arrived later - meeting at the Sanctuary of the Clans. It was likely where they always met, being neutral territory. They stood in a circle on the Pillars' platform, and Kain was seated on his throne at the base of the Pillar of Balance. Melchiah, Rahab and Dumah stood to Kain's right, Zephon and Turel stood to Kain's left, with a space remaining, presumably for Raziel. Kain's reaction to seeing Raziel's wings, and Raziel's subsequent execution provided the rest of the Council with their first bit of excitement in a while: 'The transitory thrill of something new'.
Centuries later, in Soul Reaver, Raziel returned from his execution in the Abyss and hunted the other lieutenants. In the intervening years, their physical forms had changed greatly. Limited more than liberated by their evolution, they had little freedom of movement. The Council would have been unable to meet, and if they continued to co-operate on any level, they must have communicated using messengers (or possibly using the Whisper). They had abandoned the Sanctuary of the Clans, and it had fallen into disrepair.[2,3]
Reading the Soul Reaver Background Story with hindsight, it may seem that the 'lesser vampires' referred to could be the remains of the Cabal. However, the events of Blood Omen 2 took place on a different timeline from Soul Reaver, having been brought about by the paradoxes that occurred in Soul Reaver 2. The events of Soul Reaver that we saw - and that are being referred to in the Background Story - may be quite different from the events that would play out following Blood Omen 2. We don't know exactly what the paradoxes changed, so we should probably assume Vorador's resurrection, and the formation of the Cabal didn't occur before the paradoxes were introduced.[1,4]
If we disregard the alternate continuity that includes Blood Omen 2, 'the remains of the legions, the lesser vampires' must be Kain's descendants (he was the last surviving vampire at the end of Blood Omen). In the Background Story, Raziel is talking about the junior members of Kain's empire - members of the six clan legions - from his lofty position as Kain's firstborn; they are 'lesser vampires' in comparison to Kain's lieutenants.[1,5]
- The Background Story, as given in the Soul Reaver Game Manual (UK and US versions)
- [SR1] Raziel: "My God... The Sanctuary of the Clans, reduced to ruin... Beyond these walls lay the Pillars of Nosgoth, the seat of Kain's empire. How humble it now appeared, collapsing into the dust of its former magnificence. And yet I had only just emerged... In the instant between my execution and resurrection, centuries had apparently passed..."
- [SR1] The Elder God to Raziel (referring to the Sanctuary of the Clans): "Beware, however - this hollow derelict is abandoned, but not uninhabited..."
- The Ben Lincoln's visit to Crystal Dynamics at thelostworlds.net
- [BO1] Moebius to the crowd who witnessed Vorador's execution (referring to Kain): "He is the last! Destroy him!"