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The Battle of Carteneau happened five years before the present time (FFXIV: ARR) and was the biggest event in FFXIV 1.0. The event marked the end of the Sixth Astral Era and changed the world. The following explains the events leading up to the battle as well as the battle itself.
The Garlean Empire, a technologically advanced nation from the far north of Eorzea is seeking to take over the whole of Eorzea and its resources. They begin building up large armies and preparing to invade Eorzea. Nael van Darnus, the commander of the VIIth Imperial Legion has a plan to bring about great devastation to the realm and begins the Meteor project.
The Meteor project involves using ancient technology in order to bring down what was thought to be a moon - Dalamud. It turns out this was not a moon after all, but a device that was launched into orbit by an ancient civilization thousands of years ago to lock up the elder primal Bahamut. Nael van Darnus is seeking to use Bahamut's power in his plans.
The Grand Companies of Eorzea realise what is happening and decide to put aside their differences and join forces in order to stop the plot. They eventually confront Nael van Darnus on the floating islands of Rivenroad and defeat him, however it is too late. Dalamud is still descending. This is when they turn to Louisoix.
Louisoix is a scholar from Sharlayan and he comes up with a plan to summon the power of the Twelve to send Dalamud back where it belongs. The Twelve are the guardian deities of Eorzea and hold immense power. This has to be performed directly under the impact site of Dalamud, which is calculated to be at Carteneau in Mor Dhona.
The Grand Companies ready their forces and send them to the site. What the alliance didn't know is that the VIIth Imperial Legion had also been massing troops in the area. And so the battle of Carteneau begins.
The two sides begin a large battle with neither side looking like it will win in a hurry. There is no time for victory however, Dalamud is about to come down. The moon releases a giant key to the center of the battle field and its outer shell begins crumbling. The elder primal Bahamut emerges from what was actually a prison rather than a moon, and he begins to take revenge.
After being locked up for thousands of years Bahamut is angry and unleashes his full power upon the realm of Eorzea. He burns large parts of the world with fire and destruction. Louisoix and the Eorzean alliance realise that they must stop him so they summon the power of the Twelve in efforts to place him into a new prison. This is their last chance to save the realm, and it fails. Bahamut is too strong to be contained.
There is only one option left and this is to summon the power of Althyk who is the god of space and time. Althyk sends the surviving heroes into an aetherial rift where they remain for the next five years. It is not known what happened to Louisoix however it is thought that he perished in order to save the alliance.
The End of an Era trailer, showing the battle as it happened.