A lot of the questions you guys are asking were answered in the game, most of them in act 3. By talking to the NPCs about specific things you learn a lot about the world.
Here is the story as I saw it:
You are the only exile to land on the beach. The others in the boat with you (in the login screen) died. You make your way to the first town and kill Hillock, who is a zombie from centuries ago.
You find your way to the town and they welcome you with open arms. You're a fighter and you got rid of one of the big baddies that was giving you trouble. But they don't quite trust you yet you are, after all, an exile. You're given a couple of jobs to prove you can be trusted and to prove your strength. You get a medicine chest from a fanatic on the beach, and you clean out the fetid pools.
Now that the people trust you, they ask you for more help. You're the only one who can help because everyone else is busy giving a supporting role to the exiles that wash up on shore. The beach is infested with dead and there is no food to be had here, they ask you to make a path inland so that they can send some people to scavenge the forest.
You find the prison but there's a problem. The warden is an undying. He's essentially a zombie from centuries ago made during the previous empire's reign.
You meet a woman named Piety who taunts you. She tells you to follow her but it's sarcasm. She doesn't expect you to live past the warden. How she gets past the warden is unknown at this time.
After you kill the warden you find Piety again. She's surprised and wants to block your passage to follow her. She obviously doesn't want you around for some reason. You have to make your way through Merveil's cave.
You then learn about Merveil, the siren. She was a normal woman, legend tells, but she turned evil and now her spawn wander the coast. They say that she was given a gem to place at her neck that made her sing beautiful music but it corrupted her somehow.
When you actually meet Merveil you find out she's more than an ugly woman, she's a slimy creature with nasty tentacles. Ew.
Act 2 is the weakest act in my opinion. The presentation of the quests is forced at best. It seems like act 2 was made just so you can get to act 3.
You meet your new town mates. They don't know you but they trust you almost immediately. Gruest doesn't like you but he tells you to go deal with the blackguards that were going to the chamber of sins. Why does he trust you to deal with them? I'm not sure.
At the same time you're asked to deal with a bear that's been going crazy. Also you still have to finish your quest from act 1 to open a way for the people on the coast.
You can do them in any order you want but it's hinted by the area levels that you're supposed to do the bear quest first. Why that's important I'm not sure. Personally I'd say the bear quest should be required to do first before you are trusted with more information. But whatever. The people of the forest trust you to do all of their dirty work even though you just stumbled into town wearing rags and smelling of siren guts.
Anyway, you do the bear thing. That doesn't really have any impact on the story itself but you do it. Then you deal with the blackguards in the chamber of sins.
Here you meet Meligario, a crazy machine-beast thing. You kill him too. You take his gem and Helena back to the village.
Also you open the way and finish the act 1 quest, but you don't learn anything from it.
Then you're asked to get the spear from the spider queen. You do that. Helena tells you that if you combine them you can kill a tree. Yeah. She wants you to kill a tree. Maybe the tree pissed her off, I dunno. Uh... Sure. I'll get right on that. Everyone else says don't do it.
You kill the tree. Turns out there's some ruins inside it. So you go deeper in and find a sphere. You touch it.
Oops. The world explodes. Or at least you release something. No one knows what it is and it's not explained later in the game either. It's evil though. So you're asked to fix your fuck up.
You find a pyramid inside of a cave (Who hides a pyramid inside of a cave?) You make your way to the top where you find the oversoul. Dunno what it is, but it's nasty. You kill it though and your fuck up is undone.
Yeah. That's it. That's act 2. The bandits are secondary and unimportant to the story. Killing them doesn't open up new quests and everyone's attitude toward you doesn't really change. There's only really 1 important part in this act, and that's seeing Meligario. You don't even have to kill him really, you just have to learn about him. The boss and the pyramid are unexplained at this point. I imagine we'll learn more about them in act 4.
Act 3 is the best act in my opinion. The gemling queen answers a lot of your questions and she's just fun to talk to. I hope to see more of her. I really would hate to have to kill her. It'd be fun if she followed you into act 4.
The intro is the weakest part of this act. Like in act 2 the people of Sarn trust you off the bat. They trust you so much that they ask you to save two of their most important citizens. Their youngest girl and her boyfriend. Why they can't be bothered to save them is left unsaid. They want you to do it.
I wonder how important Clarissa really is to these people? They're asking a total stranger with fresh lightning burns all over him(or her) to save her.
Anyway, you do. Lucky for them. There should be an option to kill her and steal her stuff, I swear. These guys are idiots. Then you go back to town and say she was already dead and get your quest reward anyway. Hah. That'll teach 'em.
Her lover's not with her, though. You gotta find him. Piety took him. You remember her? Well if you talk to the ugly one in town he'll tell you about her. Turns out he's ugly because of her. More on that later.
So you fight piety and she disappears, but the boy is dead. She killed him doing an experiment.
After that you're asked to do some side-quests which are pretty secondary to getting rid of the blackguards. Again why they want you to do it, I dunno. But you do.
The fun part about this act is that you need to do the side quests. They seem secondary but they're actually important. While walking around the sewers you find a way under the river, but it's blocked. You'll have to find a way through them.
When you meet the gemling queen she tells you she'd be happy to make a way past the thing blocking your path. It's important you talk to her because she answers a lot of your questions.
Here's a little back story you learn form conversations with her and Grigor.
The gems themselves were used by a man named Malachi. He found a way to put the gems in people to enhance certain traits of them. He was an evil scientist of old, I guess. And a genius. The undying that you've fought this entire time were his failed creations. Not the skeletons, the things that say 'undying this' and 'undying that'. Those are creatures with pieces of gem stuck in them. Turns out Merveil's gem actually came from one of Malachi's successes. Why did it make Merveil insane? Well the gem wasn't inserted by Malachi who knew how to do it. She just wore it as a necklace so it made her crazy.
You learn form Grigor that he is a failed experiment by Piety who is trying to recreate the successes of Malachi from the original Sarn empire. Piety is evil because she experiments on living people. You want to kill her because of what she did to Grigor and others like him.
You then kill the general who tells you he's only doing god's work. Who is his god and why is this work so important? Not explained yet.
Then you learn Piety is hanging out in a temple. You go in and find all of her failed experiments. These are her experiments, not Malachi's like the undying you met earlier. All of these things you're killing used to be living people, probably soldiers or exiles.
Then you kill Piety because she's an evil bitch for doing those terrible things to people.
That's the end of act 3. It's longer than I make it out to be, but it's a fun act compared to act 2. It does tend to drag on at some points. I imagine it could be split into 2 acts, Sarn East and Sarn West rather than pushing this all into one act.