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In the days before Arachnos, Mercy was a lone town resting on the low banks of a large island. It was home to some fishing outfits and more than a few wintering pirates, but frequent disappearances and tales of bizarre snake-like creatures kept the population to a minimum.
Lord Recluse claimed this lonely spot of land shortly after his rise to power. Fort Cerberus was erected and patrols dispatched to discover the truth of these snake-men. The creatures were found in great numbers, but Arachnos' overwhelming firepower quickly pushed them back into their warrens.
Over the next decade, Mercy grew and the snake-men were forgotten. They were far from dead, however. They had simply retreated deeper into the bowels of the earth. Lord Recluse knew full well the Snakes remained, but he was content to leave a few survivors for future study and possible use in his plans of world conquest.
The Rikti War and the many opportunities it presented changed Recluse's focus in the new millennium. The Snakes were forgotten and allowed to multiply. A year after the Rikti defeat, they rose from their warrens and rampaged through Mercy. Arachnos repulsed the mutants, but Lord Recluse mysteriously and quietly left the lower end of the island to the Snakes. The creatures had proved quite powerful, and he felt they could be studied and put to use in many of his secret operations.
The Snake-infested area of Mercy also provided Lord Recluse with another useful purpose: proving ground for super-powered beings. Those with promise are brought here and tested with a series of tasks to determine whether they have what it takes to survive. Those who do are tracked for possible recruitment into Arachnos ranks. Those who don't are left to fend for themselves, becoming prey to the stronger.