A History of Magic
While the main timeline gives names and dates for specific events, this chronology indicates broad eras in the history of the wizarding world and traces the development of the ever-widening gap between the Muggle and wizarding communities.
Ancient Egypt and Greece
Egyptian wizards put curses on tombs; nowadays curse-breakers for Gringotts try to regain the treasure locked in those tombs, one pyramid has mutant skeletons of Muggles who'd broken in and "grown extra heads and stuff." Magic is integrated into society and Wizards are held in high esteem. However, Dark Magic is already being practiced in ancient Greece. Herpo the Foul created the first Basilisk as well as the evil magic of Horcruxes during that time.
about 1000 AD
Growing distrust on the part of Muggles for wizards and witches compels the four greatest witches and wizards of the age to found Hogwarts. Salazar Slytherin builds the Chamber of Secrets after his point of view that only pure-blood wizards should be allowed into Hogwarts was dismissed. This separation of the two cultures continues and grows over the next 700 years.
1000 to 1300
The Wizarding world is governed by the Wizards Council (sometimes referred to as the Warlock's Council). While the relationship with the Muggle world becomes more distrustful, witches and wizards reach out to others of their own kind. The Triwizard Tournament and Quidditch become national and international events.
Witch burnings; Muggles were particularly afraid of magic but not very good at recognizing it, Wendelin the Weird burned at the stake 47 times in various disguises (Flame-Freezing Charm). There is growing discrimination in the Wizarding world against other magical beings, such as House-elves and Goblins.
With the coming of the Renaissance and the increasing reliance among Muggles on scientific reasoning, the break between the Wizarding and Muggle worlds is becoming more and more complete. Each culture goes on to create their own civilization: social structures, economies, governments, etc. Each borrows a little from the other as the years go by but it becomes apparent that the Muggles must be kept ignorant of the existence of their magical kin for their own good. Some Muggles persecute their magical neighbors, others try to exploit magical power for their own gain and for quick fixes to their problems. However, Britain still has court wizards (Nearly Headless Nick, for example, was a court wizard in 1492). Beedle the Bard writes his Tales to preach a message of tolerance toward Muggles, but his message is subverted or lost over the ensuing centuries as the division between Muggle and Wizard grew. With the intolerance of Muggles came a growing prejudice among some in Wizarding society in favor of the purity of blood. At the end of the 1400s, Daisy Dodderidge builds the Leaky Cauldon along a country path outside London as a portal between the Wizarding and Muggle worlds.
1600 - 1700s
Goblin rebellions break out all over Britain, and (perhaps not coincidentally) St Mungos hospital is established. Muggle persecution reaches an all-time high. These are dark times for the Magical Community. The governments of the Wizarding World meets to consider solutions to the crisis and create the International Statute of Wizarding Secrecy of 1689 (date uncertain, given as 1692 in some canon sources). This not only completes the separation of the two cultures but also lays the responsibility on the various Wizarding governments in each country for maintaining the secrecy of everything from Quidditch games to dragons. Over the years, for Muggles, magic becomes the stuff of fairy tales and legend. By 1750 the Ministries of Magic from each country assume responsibility for the control and secrecy of their local magical flora and fauna. Wizarding families begin to cluster around small towns all over Britain where they find relative safety and anonymity.
Prejudice against Muggles and the ideas of Pureblood supremacy is still very strong. These sentiments are manipulated by Tom Riddle as he becomes Lord Voldemort and makes two attempts to take over control of the Wizarding World in Britain. His first attempt, in the 1970s, is cut short in battle with James and Lily Potter and his defeat by Harry Potter (31 October 1981). The Giants, most of whom fought for Voldemort, retreat to northern Europe. Twenty years later, Voldemort rises again (1994), takes over the Ministry of Magic and Hogwarts (1997), and is ultimately defeated by Harry Potter (2 May 1998).