"Where are we?"
"We are in the Orocarni, and we are the Alliance!"
- Alatar telling Chellon about the Alliance.
The Alliance was the name of an order of different races, all dedicated to defeating a cult called the Sands of Ankar, led by the sorceress Kashaka .

The Sigil of the Alliance.
Founding[]
Before the Alliance was formed, the different races living in the East stayed seperated from each other. The four Dwarf clans never met, the Avari kept secret and the Easterlings served Sauron. The Dwarves and the Easterlings (at the time) were under the control of Kashaka. This all changed in TA 1000, when the Istari arrived in Middle-earth. Two of the Istari, Alatar and Pallando, journeyed to the Orocarni, the homeplace of the Dwarf clans. They freed three of the clans from Kashaka's control, along with many of the Easterlings. They also tracked down the Avari, and the three races, commanded by the Blue Wizards, formed the Alliance, in order to stop Kashaka.
War with Kashaka[]
The Alliance soon went to war with Kashaka, trying to kill her on multiple occasions in the hope that with her dead, her control over the Dwarves of the south and half of the Easterlings would break. Dozens of times, the Alliance came close to killing her, just as they were nearly wiped out themselves many times. However, both sides persisted.
The Alliance base was Khazikal, a great Dwarven kingdom founded when the three allied Dwarf clans merged into one. Khazikal was three times the size of Khazad-dum and had a rich supply of gold, silver, steel and mithril, making the Alliance soldiers incredibly well armed. However, Khazikal was quite a distance away from the Sea of Rhun, where the Easterlings and the Avari were located.
The War carried on until the War of the Ring, when Kashaka suddenly stopped fighting and disappeared into the West. It turned out that she had gone west to conquer Eriador, Rohan and Gondor, creating an army big enough to crush the Alliance. However, the Alliance spies in Eriador saw her after the events in Bree involving Mageth , Chellon, Bolin and Giniriel , four people who would become influential in the Alliance's campaign to defeat Kashaka.
War of the Gem[]
Alatar and Pallando rescued Mageth, Chellon and Bolin from Aglarond during Kashaka's attack, bringing them to Khazikal for safety. After a few days of debating and pondering, they decided to muster the forces of the Alliance and march west to face Kashaka. They gained the help of Radagast the Brown and Thorondor, Lord of the Eagles, who had been sent by Manwe to aid the Alliance, and so marched westward, meeting Giniriel along the way.
Mageth was able to gain the aid of King Thranduil, who agreed to send his soldiers westward to divert Kashaka's army at all costs. However, while Mageth was gone, the Alliance was attacked by Kashaka's auxilary forces, beginning the Battle of the Dust. The Alliance gained a crucial and overwhelming victory, almost annihilating the enemy forces and killing one of Kashaka's commanders while losing only a few soldiers.
They then marched southwards, saving the Elvish colony in Ithilien from more of Kashaka's men. However, Legolas Greenleaf, the leader of the colony, refused to join the Alliance. Despite this, they did gain aid in the form of Elladan and Elrohir, who had travelled south to find help. The twins were good friends of Mageth, and so joined the Alliance when it marched into Osgiliath, finding the city to be free of Kashaka's control. There was hope, yet.