The colonists survived but have totally forgotten large sections of their early history. This resulted in their available technology falling to an early medieval/pre-steam era. Magic is now not only possible, but is now relevant and usable. The ability for a person to use magic seems innate.
The initial fragmentation has led to the rise of idiosyncratic authoritarian communities, each with their own beliefs. With little to no communication between the communities, the rise of magic and wondrous creatures caused a number of these communities to form ossified intolerant city states. This ultimately led to the city wars where belief was pitted against belief.
The devastation caused by these city wars combined with an intolerance of then societal norms, led to the great migration. People tired of the intolerance and authoritarian nature of the societies in which they were born led to a significant proportion of them moving to more accommodating areas forming their own settlements. This led to the fall of most of the city states and the eventual rise of various empires.