Spiral of Death

Zanarkand's Ruler

1000 years ago a war was brewing. エボン=ジュ, known as Yevon=Ju, was the leader of Zanarkand, a city of Summoners where people used both magic and machines for improving their lives. Zanarkand didn't use machines for war and because of this they were losing against Bevelle, a city which used the power of technology to make weapons of mass destruction.

Yevon was a powerful Summoner and he didn't want to lose everything, so he began to seek an ultimate power. He and the remaining survivors escaped to Gagazet Mountain, where he devised a plan to turn the people of Zanarkand into Fayths. Their purpose as Fayths was to dream of an ideal Zanarkand that resembled the one before the war, so that Yevon can summon it into reality.
Fayths at Gagazet Mountain

Yevon also controlled millions of pyreflies into becoming a powerful new physical form known as Sin. Sin was an indestructible armor created to protect himself from machines (機械) as he summoned the Dream Zanarkand. Sin was able to wipe out Bevelle's military, but it also destroyed the rest of Zanarkand because the city also had machines.

Yevon's life as a human ended as he transformed into an immortal being which only existed to summon. Neither good, nor evil, he became a dreaming entity. Protected by Sin, the entity would able to summon the dream for an eternity.

Dream Zanarkand

Dream Zanarkand is actually an immense Aeon that Yevon summoned into existence by drawing energy from all of the Fayths combined at Gagazet Mountain. This dream city exists in physical form, just as any other Aeon does, and is located somewhere far away in the sea, where nobody living can reach it. Yevon was so powerful he could summon something of that scale and continue to do it for a thousand years.

The Fayths are continually dreaming of every memory, person and object from the original city because they want to keep Zanarkand alive; real or otherwise. This was their way of saving Zanarkand. However, this dream can't last forever and they've begun to grow tired of dreaming.

People from the dream who become aware of their existence as a dream are recreated and reverted back to how they were. Only dreams like Tidus or Jecht who have been touched by Sin and who left an impression on Spira's people have the potential to become more...
Dream Zanarkand

Yevon Teachings

Before Zanarkand was destroyed, Yevon taught his daughter how to calm Sin's rampage. His daughter was named Yunalesca and she was also a powerful Summoner. She offered the people of Bevelle her help, for a price. Yunalesca would go to Zanarkand's ruins and defeat Sin only if Bevelle's people would start a new way of life - similar to a religion - that revered Yevon.

Yunalesca and her husband Zaon were successful in defeating Sin but they did not truly put an end to it. Regardless, Bevelle was saved from Sin and the leaders of Bevelle honored their end of the agreement. New teachings were created and named after Yevon, while the story of Summoner Yunalesca and Zaon, her Guard, became widely known throughout the world.

Followers of Yevon teachings preached that Yunalesca and Zaon's love is what defeated Sin, and that the Final Summoning was the only way to do it. The truth about Bevelle originally being Yevon's enemy was also hidden from the history records, an easy feat since survivors were few and all technology destroyed.

However, the time of peace after Sin was defeated was only temporary and Sin eventually returned. The newly appointed 総老師, Grand Maesters, of Bevelle then preached that machines were the reason for such attacks. It became the teachings of Yevon that Sin hated not only war machines but any technology that made life easier. Few people dared to go against the teachings and used technology. Those who did, such as the Al Bhed, were branded heretics.
Zaon's Fayth

Sin

The word "Sin" was chosen for its meaning in the english language: a deliberate transgression of a religious or moral law. Yevon teachings preached that if the people of Spira stopped sinning, Sin itself would disappear.

Sin is so powerful that simply being near it makes one affected by シンの毒気, Sin's toxins. In reality, it's the nature of Sin and how it was created which makes people confused as they come into contact with it. Sin is also the only link between the Dream Zanarkand and Spira. It's possible for an unsent person to ride Sin and travel between both locations, which is what Auron did.
Sin

Yunalesca and eventually the Yevon religion's method of defeating Sin was only a temporary one. After Sin was defeated for the first time, Yevon=Ju broke the connection between Yunalesca and Zaon. This killed Yunalesca but she continued to exist in Zanarkand as an unsent because she could not rest in peace.

Since she still loved her father, loved Zanarkand, and had unfinished business with Bevelle, she had the will to stay alive. It's very possible that nobody was there to send her off, and surely she wanted to keep both the memory of Zanarkand and her father's honor alive...
Song of Prayer Princess Summoning End