Freeport is a port city in the island chain known as The Serpent's Teeth. The original settlement was founded centuries ago, and soon became a haven for pirates. The town thrived because of a simple pirate code: Do whatever you want on the high seas, but don’t go against your brothers in port. Pirates ruled the waves until about 200 years ago, when the mainland navies began to hunt down ship after ship. The men of Freeport needed a navy of their own, so the captains united their forces. Leadership of this Great Raid was shared between the two greatest captains, Drac and Francisco, and after its success, both declared themselves Sea Lords. (The holiday of Swagfest celebrates the Great Raid to this day.)
The other maritime nations united in an attempt to crush Freeport. This war lasted for ten years, before Drac hatched a new plan: He made a bargain to betray Francisco in return for a truce and recognition of Freeport as a sovereign city-state. The city went legit. Many surviving pirate captains left rather than work with Francisco's betrayer, but others stayed and helped Drac turn Freeport into a major trading center. Rather than claiming a title and starting a dynasty, Drac chose another old sea hand, Captain Cromey, as his successor, and gave the Captains' Council the right to approve future successors.
Over the next hundred years, various crises resulted in the Council gaining more power. Sea Lord Marten Drac nearly bankrupted the city. He also instituted a succession law: Future Sea Lords had to be descendants of the first Sea Lord Drac. His successor, Anton Drac, repaired much of the damage, but did not repeal the succession law. He was assassinated 16 years ago, as Freeport prepared to join in a war on the Continent. His successor, the nearly unknown Milton Drac, cancelled all military aid and spent the war chest on a monument to Freeport's maritime power: The Lighthouse of Drac, called "Milton's Folly" for its extravagant expense.
Five years ago, a small band of adventurers learned that the Sea Lord was in truth a mad cultist, and foiled his plans to destroy the city. Milton Drac died the night of the inauguration of the Lighthouse, leaving no clear heir or successor. This plunged Freeport into the year-long Succession Crisis, during which Freeport also had to endure a barbarian invasion and a hurricane. Finally, four years ago, Councilor Marilise Maeorgan was proclaimed the new Sea Lord, becoming the second woman to ever hold the title. (The first had been Marquetta, who is chiefly remembered for destroying the city's Thieves' Guild a century ago.)
Freeport's troubles continued into Maeorgan's first year. First, a freakish supernatural event, the Great Green Fire, set the island ablaze and nearly wiped out the city before the Wizards' Guild finally quenched it. Secondly, the town of Libertyville (on the neighboring island of Leeward) was re-founded and began competing with Freeport. However, Lady Marilise has turned out to be a stronger leader than expected, and she has largely been able to maintain the status quo these past two years.