The Firepeaks were discovered by a band of dwarven adventurers in -11900 DR who then decided to settle there as many of their kin had done. The last wave of the dwarven expansion followed them after many years. Unfortunately, no more dwarves followed them that far and eventually communications completely broke down with the west.
Since the Firepeaks were sacred to the Tuigan, who believed the region to be the home of their fire god, the nomadic humans often visited the dwarven kingdom, naming them Siremun or Iron Men (who they believed were jealous of them because their legs were too stunted to reach the stirrups of a horse). Regardless, the dwarves took their Tuigan name as the name of their kingdom.
Siremun contained many deposits of skystone, a transparent volcanic rock that served as a durable and efficient building material with which they built most of their structures and then later traded with the Caliphs of Semphar and Yaimmunahar.
The dwarves though weren't the only creatures to migrate from the west to the Firepeaks. Using Underdark tunnels, 8 tribes of orcs also moved into the region,numbering about 7,000 in total. They discovered the dwarves and immediately waged war on their ancient enemies, a war in which the dwarves suffered greatly due to their being outnumbered and to the tactics of king Markos Silverhammer.
The various clans of dwarves had, over the years, developed grudges against each other and constantly argued amongst themselves. King Markos, although a good dwarf, was very old and grew tired of resolving these constant squabbles. The only thing that made the clans put aside their differences was the threat of the orcs. Thus, he did not want to kill too many of the creatures for fear of having nothing left to unite the clans. Therefore the efforts made to exterminate the orcs were slow and cautious which resulted in the loss of several of their outlying holdings to the tuskers.