I'm pretty sure that in the real world we don't periodically fight hordes of giant spiders that attack towns.
I'm pretty sure in our real world our "monsters" have changed along with the changing times.
Back in the Medieval days (like BM) there were many strange creatures because Europe simply hadn't seen that much stuff.
Modern world? Well, my dear boy, you are forgetting that our monsters of today, that invade our lives, and kill many, have been the enemies we have always fought yet only recently could see: Bacteria, viruses, and prions, three infectious agents, all organic, but not all "alive".
You really don't think those would be considered "fantasy"? Try going back in time to the Middle Ages in Europe where no one had invented even the simplest light microscope and try telling them that there was a tiny organism that infected their bodies and killed them from the inside (Well, they did have an idea of bacterial infections, and maybe even viral infections...don't get your hopes up for the viral infections though.)
But wait it gets better. Even if they buy into your description of bacteria, try describing viruses to them. Tiny things they can't see or touch, that are just cases of protein that carry genetic information (Haha, good luck trying to explain genes. Our good monk Mendel won't be around for another five hundred or so years). Then explain that these viruses might not even be considered alive, that all they do is present certain markers on their protein coats that allow them to infiltrate our bodies' cells and cause them to replicate the viral genome until the host's death. Also explain to them that some such viruses can survive for thousands of years in a dormant state.
And then try explaining prions to them. By the time you say "protein" you'd probably get a few looks. Even better when you try explaining that proteins form the necessary structural components of pretty much everything in our body. And then tell them about how those aren't actually alive either, but can still infect our brains, somehow tearing holes into the tissue and eventually leading to a painful and absolute death. Oh, and that there are no methods available either to them (Medieval people) or modern people, to denature or otherwise destroy those prions, and that once infected, death is certain.
The thing is, in our modern world, there is a different culture. Had we not gotten more into science and rational thinking, then our worldviews on stuff like tiny little invaders would be a lot different. And that raises a good point too. Why do we think that the "fantasy" analogues in our realm have to be within our scope? The whole point is that such supernatural things are unseen and rarely understood (Interestingly, for a good number of diseases we still don't know the 100% mechanisms.)
Also, for the macocosmic fantasy...Go talk to a theoretical physicist. Now that's some HIGH fantasy right there.
Now...further regarding the Blight, Soulforge, etc, to give a plausible explanation...
I think that a continental change is indeed possible, however, it requires a certain deal of open-mindedness even if Mr. Tom shoots it down. This is just a very non-IC theoretical poke (Look, whatever higher being out there doesn't go and tell the theoretical scientists of every era that has subsequently been proven wrong by later generations of humans that they're wrong. He/she/it/they pretty much sit back and watch the silly humans try to figure it out themselves, finding mistakes along the way to correct previous mistakes, but making new ones in the process.)
So here's the thing: Continental change is indeed possible, and indeed possible in such a short time period, via rapid and irresponsible use of different technology that exacts a cost on the land.
My theory: "Daimons" are not so much daimons, as the hallucinations formed by affected minds. The "daimons" could have true forms, which might in fact be that of the people who brought in the new technology. This does not mean that they had to have fantasy aspects. To the contrary, I would contend that nothing in BM actually says that the timeline of technological progress must be equivalent to the technological progress of our real world. And why should it? There were so many different factors that determined how our world progressed, just like how BM progressed. It is entirely possible that the world of BM came to know how to industrialize long before our real world did.
Now why does that matter? Well, because rapid and irresponsible industrialization does, in fact, have swift continental effects. We can even see it in our real world (Not going to name any names though). Only we managed to get in a lot of regulations somewhat on time (heh, global warming...)
Consider then the scenario in which industrialization occurs, people don't really understand it, use it irresponsibly, then discover that they can mass produce happy fumes. Look, I'm not saying that those BM people knew what the heck they were doing. Actually, to the contrary, they probably had no clue what they were doing, which is the whole reason the Blight formed in the first place. In our real world, most of the time WE don't even know what we're doing. A ton of discoveries were made because we had no clue what was going on, and were just lucky enough that whatever surprising thing happened didn't end up killing us, or at least not too many of us (Though sometimes they did)
So my thought is that Overlord is a drug lord and/or mad scientist, and his Soulforge is a code name for his mass producing system of labs that create hallucinogenic drugs that can be put into the air. The Blight is the result of increased pollution in the environment that had mutagenic properties, which had very rapid time-course. Do these things exist in the real world? Well, nothing we know of that acts so quickly...I think?
Anyway, the origin was that the original "daimons" were ambitious researchers who wanted to dominate the world or something (Hey, I never said the intent had to be that different). And so they decided to find something that could help them with that. When they discovered a way to make stuff that would cause fear in people and make them seem really powerful, they were like "Heck yeah!" and did it even more. That's why the Blight only started appearing in Inv 4. That's when they got a bit carried away.
