Here's some suggestions for you.
You asked for some story idea's. Here's a bigass backstory for you. I purposefully left a lot of names unsaid, and the concept of multiple races ambiguous, as well as deities so that you can add fantasy flavor as you feel fit.
Story
Magic doesn't have a great reputation. People tend to be suspicious of anything that can create something that they perceive to be nothing. Folktales rife with stories of weasly sorcerers striking down burly and handsome warriors with cowardly chicanery doesn't help. Neither does the whole, y'know... almost destroying the whole world thing.
Maybe I should explain. Erhem.
In times of yore (what kind of a word is yore anyway?), magic was wild and free. Leftover from the forging of the world, magic was the cloth from which the world and all of it's elements were cut by the creator. It was wild and untamed, the primordial former chaos of the universe incarnate. The races tried to tame it from early on, but progress was... unpredictable. In some people, magic flourished strong and readily, and was easily used and controlled. For others it was almost unusable. And in the most dangerous cases, it came easily but too greatly to be controlled by any mortal, causing great destruction and sorrow for the user and those around them. And due to it's chaotic nature, it was difficult to predict how it would interact with any individual. Therefore the early Magi sequestered themselves from society, and became a people of secrets. The fickle but powerful nature of their arts became known only to a select few, and they hoarded this power and knowledge to themselves. The nature of mortals being what it is, this created an instant antagonistic relationship between the self superior Magi and the superstitious and suspicious normal's. Still, when a man can raise an army of walking corpses from the earth and shatter stone with bolts of lightning, that man tends to get put in charge real fast. And so it was that the Magi became the center of power in the world, despite the fomenting discontent from the 'lower classes'. Mage-Kings ruled every major cosmopolitan nation, and magic supplanted industry. This had certain side effects on the natural world itself, as the chaotic web of creation caused unpredictable changes in the plants and animals of the world. These dangerous magical mutations are the forebears of what we call monsters.
There were those who were not satisfied with the magocracy that dominated society. In the wild northlands, disparate tribes banded together, ruled by men and women who used steel and invention, instead of magic, to adapt and control their societies. Isolated and thus outside of the Magi's concern, they were surrounded by bountiful natural resources: iron and coal and strong stone and other things considered worthless by the outside world due to their lack of arcane value, rather than summoning rain to water their crops they began to build irrigation systems. Complex protective enchantments were replaced with stone walls. Swords were forged, mechanical devices invented. These tribes were finally united by steel (also invented by them, in blast furnaces that they created by and for themselves) and diplomacy, and became a single unified kingdom. Still they were a backwater- they were no threat to the mage's power. What is a hundred men armed with swords and bows to a dozen that can split heaven and earth? Nothing. The state of affairs suited them quite well anyway, they had no desire to associate with the increasingly decadent southlands, and instead focused inward becoming culturally and scientifically more enlightened.
To the south meanwhile, things began to flounder. Magic by its nature is unsafe and chaotic. It could have unpredictable side effects even when wielded by the most powerful practitioner- indeed, the chances of side effects increased the greater the expenditure of energy. This created an unfortunate climate where magic was used to correct the problems created by magic, which created only more problems. On top of that, a population provided for almost exclusively by arcane means exploded exponentially, while for unknown reasons the number of people capable of becoming Magi were born less and less frequently. Even the great Magi-Kings could not possibly provide for all, and the divide between the magically inclined and the normal's was sharpened even more as those who could magically contribute to society were elevated and given finer living conditions then those who could not, who lived in squalor and labored like slaves with simple and primitive tools. Still, this state of affairs may have gone on forever if not for the compassion of a woman, the brilliance of a man, and the fear and avarice of the Magi-Kings.
Danae was the jewel of her large family. Various legends personify her as the most beautiful, most clever, or most charming woman to ever live. The veracity of these claims is debatable, but what can be said for certain is that she was a Magi of middling power with a strong sense of social responsibility. Magical middle management, if you were. She had achieved a decent life for herself, and used her powers to try and improve the situation of her family. Unfortunately for her she had a rather large and gregarious family, so there was always another cousin or uncle or friend she had to try and rescue from a life of stricken poverty and destitution. It was beyond her capabilities to help everyone though, and unique amongst the Magi she actually felt concern for those below her station. This uncharacteristic compassion drove her to turn her back on the mage kingdoms, and she left her life of luxury for one of exile, taking her extended family northward with her, to dwell in the lands of Steel. It was there she would meet and marry the man who would turn the Kingdom of Steel into an Empire.
Amongst the people of Steel, Daedalus was well respected and famed long before his journey to the throne. Powerfully built and sharp of mind, he was a skilled warrior, and a craftsman famed for his smith work. Most importantly however he was an inventor, one who observed the natural world around him and sought to understand it to better the lives of his fellow men. How exactly he and Danae met is lost to the sands of time, but what is known that when she arrived in his homelands Daedalus was instantly fascinated with the process of magic, which was incredibly rare in his land due to a lack of necessary component resources. It is said he studied what magic Danae could teach him night and day, eventually reaching an epiphany. With his knowledge of mathematics, engineering, and astrology, when set against the arcane teachings and words, he began to notice patterns. He began to see repeating symbols, equations, numbers within the spells and gestures. He distilled the forces of chaos and change into a science by using the most basic of all languages- shapes and mathematics. He took Danae as his wife, and became the world's first Rune-Smith, striking symbols of power into earth and sky to submit magic to mortal will. What was once only truly controlled by the Creator was delivered into mortal hands, and the ripples from this event would change the world.
To the south, a climate of despair gripped the land. For whatever reason, the magic had begun to fade from the world. The ruling mages found it harder and harder to work their spells, and they began to clash with each other over increasingly limited resources. It seemed as if all the world would consume itself in war, and in one last desperate bid to save themselves the Magi-Kings convened and beseeched the spirits from beyond the nether that they considered gods for guidance. These spirits imparted unto them the birth of Rune-Magic, and told the mage kings that due to the inherent chaos of sorcery, this new orderly method of its use was anathema to the spirits that fed their powers. As Rune-Magic spread, the Magi would continue to weaken until they had no more power left. Their only hope to save themselves and their power was to destroy this knowledge, by grinding the kingdom of Steel and all who dwelt in it to dust. Theorists and historians debate to this day whether what these spirits told the Magi were true- some claim they were not gods at all, but malevolent creatures known as demons seeking to turn man against man. Other's claim that they were jealous of mans presumption and ability to forge order out of chaos, a power previously known only to gods. Whatever the case, the Magi believed this, and all of their kingdoms united towards what they thought to be their common enemy- The North men of Steel.
Back to the North, ignorant of the growing danger from the Magi, political change was shaping the land. The king of the tribes had died with no heir, and for the first time in a century they were left without a unified leader. Sensing the dangerous possibility of civil war, the individual chieftains of each tribe decreed that each tribe would, by popular election of the people, put forward their greatest representative and champion to be King. Each of these would then be judged by the chieftains, and by secret vote elected to be King. Daedalus, whose runic arts had brought great prosperity and honor to his tribe was selected by his people, and sent before the tribal council. Though he was usually a man of few words, the sharp mind of his wife Danae was behind him, and it is said inspired by her he delivered a speech of unparalleled greatness, vowing to lead the people of Steel to great prosperity and security. The chieftains were moved, and Daedalus became king. He would rule peacefully for two years, becoming the greatest Rune-Smith to live as his wife with her history of magic becoming the greatest Rune-Mistress, and they did share this knowledge with all the people of Steel, and a great many other advancements made possible by this mastery. It was these arts that would save them, when the southern Magi came.
There was little warning when the combined armies of the Magi came over the mountains and began relentlessly exterminating all in their path. Their spirit guides had told them that the secrets of Rune-Magic had to die, and the only way to ensure that was to kill every man, woman, and child north of the mountain wall. Poorly prepared but vast armies of slaves marched with trained battle-magi at their backs, quickly overwhelming the first unprepared villages of Steel. When word reached of the invasion reached Daedalus, he girded himself for war and lead the combined armies of his people south towards the bulk of the Magi's armies. Recognizing that the battle magi were the true threat on the field, troops of fast moving Rune-Warriors trained in the arts by Daedalus himself were set against them, harassing and killing the unprepared Magi whenever possible and confounding their great spells of destruction with runes of protection and their organized mobility. There were far more slaves then Magi, and though every battle was hard fought, the southern army gave ground as it's commanders were slain and men deserted en-mass once they were free of their mage's yolk.. The Magi has miscalculated grossly, expecting their superior numbers and destructive power to allow them to easily crush what they perceived to be barbaric north-men. They were forced to flee in fear and humiliation back over the great mountain range that always separated their two lands, abandoning many slaves in the process. The Northmen gathered up these slaves, and a great cry for blood and vengeance went up amongst the men of Steel. Daedalus' wife Danae, out of compassion, prevailed upon him to spare these men, and so convinced by her he decreed these men could be freely welcomed as free-men amongst them after an oath of loyalty, reasoning the knowledge these men had of the Magi and their homelands would be invaluable. At first, Daedalus was content to have defended his land and driven out the invaders, having no desire to wage a war on southern soil. However once again Danae prevailed upon him, speaking of the sorrow and despair that men lived in under the Magi's callous rule. He could not find it in his heart to deny his wife, and furthermore he began to realize that the Magi had come for the express purpose of exterminating his people. They were now locked in an eternal battle, and the war would not end until one side was destroyed utterly. Thus spoke Daedalus to his people, and he lead them to prepare for invasion into the southern lands. All hands were set to toil to prepare for struggle, and less than a year after the Magi had fled from the battle lines back to their own lands, the men of Steel marched south to conquer and destroy the Magi-Kings.
War was long and arduous. At first great progress was made into the southern lands, as confusion and disarray following their defeat in the northlands had shaken the Magi controlled cities. Soon, blocks began to mire their progress however. First, the Magi began employing their battle-magi mounted to prevent assassination by the on foot Rune-Warriors. Thus, Daedalus forged runes of speed and hammered them into the horseshoes of his own skirmishers, and built crossbows of metal and wood marked with runes of accuracy so that their bolts would not err, and hunted the commanders thusly. Following this, the Magi began to blight the land, scorching it of life so the north-men could not forage, and harried his supply lines at every turn. In response, Daedalus built great armored wagons, drawn by oxen branded with runes of strength so that their skin would turn a bolt as if it were iron and so they could pull ten times their own weight. Then they began to encounter great walls of stone, fortifications built in great haste by an army of slaves patterned after the north-men's own city walls. Unable to assail these with men or cavalry, Daedalus invented great siege engines- armored ladders that could carry dozens of men to the top of a wall at once, and rams of steel shod with runes of smiting that could break any gate, and great runed catapults that could fling boulders the size of mountains. Cities were broken before them, and it is said many surrendered without a fight after their populace revolted against their Magi overseers, sensing their coming salvation in the Northmen. In a last act of desperation, the Magi convened in their remaining stronghold and attempted to summon a mighty spell of destruction, one with the potential of destroying almost all living things of the land, north or south. Warned of this by fleeing slaved, Daedalus departed personally, Danae by his side, and infiltrated the Magi stronghold using runes of invisibility and silence, and there it is said they slew the last remaining Magi-Kings, forever freeing the southern lands from their rule.
On that day, Daedalus was crowned Emperor of a unified continent, and he decreed that all men were henceforth free and to be judged by the merits of their craft, not the powers allocated to them at birth. Furthermore he decreed that as he attained power by election, so would every Emperor after, and so too would the chieftans who elected the Emperor. Thus the people would elect their chiefs as well the candidates for Emperor, and the Chiefs so elevated in turn elected the Emperor. Thus it was, thus it has been, and the Empire of Steel was born. Daedalus and Danae ruled in peace following that, rebuilding what war and centuries of unrestrained magic had corrupted. Emperor Daedalus lived to be 150 years of age, powered it is said by a secret rune which granted he and his life eternal youth and vitality that he shared with no others. Then it is said, word came to them of one final hold of Magi, an island far over the horizon where the last of the Magi-Kings were said to have fled and rebuild, and Daedalus departed himself with a fleet of his finest warriors at his back, and his wife and children by his side. None were ever seen or heard from again. Common folklore holds that he shall return one day to rescue the Empire of Steel during its blackest night.
History has marched on for almost eight hundred years since then. The Empire has suffered and put down two rebellions, withstood a plague, and weathered an earthquake that ruined crops for three years. It has continued to survive because of its constant dedication to innovation, and the power of its runes. Despite this, fear of magic, even controlled magic run's strong amongst the commoners. People strong in the ways of the Magi are still born, with more apparent regularity then in the times of Magi-Kings, and secret cabals of Magi are always hunted lest they reclaim their power once again. The Empire is stable, but far from at peace. Such is the life of one who wields the runes.
