"The Shadowfell belongs to me, you insolent little demigod, and I intend to take it back!"
The Underdark Wars refers to the period of conflicts between Jenova and Lolth in the thirty years after the creation of Jenova.
Prior to the creation of Jenova, Lolth had ruled the Shadowfell, the Underdark and, for a time, the Faedark (beforing ceding power to Ystrom, the Change of Seasons). She had her eye on expanding into the Material Plane; however, the Council of Three vowed to stop her. They came to the Shadowfell with their forces to confront her. As is told in the Book of Jenova:
"The Council of Three reached the castle, where the Spider Queen awaited them, ready to use all of the magic and energy of the Shadowfell against them. The world shook as they fought each other. Bahamut, now appearing as a warrior, with his giant sword of might; Erathis, providing defense and protection; and The Raven Queen, using the very fabrics of life themselves. Light and dark, good and evil, chaos and order clashed; and slowly, with the energies of the universe floating around, a figure began to form out of the shadow. With every meeting of energy between the great Gods and Goddesses of the Universe, more power was shifted into this figure; the energies of the Shadowfell were being shaped, the will of the realm itself was becoming formed into a new figure. The shadows formed a new being. This new being opened her slim eyes.
The fighting ceased, as all were shocked at this new being. None, not even the Gods, knew what this new being would do. She looked at the Council, then at Lolth, then again at the Council. Her eyes, the only source of light coming from the new being, vanished, and suddenly Lolth was overtaken by shadow – and disappeared."
Lolth was kicked out of the Shadowfell, suddenly, and told it was no longer hers to rule. This infuriated her. Furthermore, Jenova let it be known that any follower of Lolth who wanted to escape the Web would be welcomed by her, and to Lolth's dismay, many of her followers obliged.
Lolth declared outright war on Jenova. She vowed to eradicate her and retake the Shadowfell. Meanwhile, Jenova, who hated Lolth and everything she stood for, vowed to liberate the Underdark from her rule.
For thirty years, the two sides waged war. They were mostly deadlocked, and when one side looked to be on the verge of victory, the other would strike decisively, restoring the status quo. Lolth clearly had the superior force and experience, but Jenova's ties with the Shadowfell proved too much for her to overcome.
The end of the war came in the form of a decisive victory by Jenova in which she embarassed Ti'irtha, Lolth's daughter, in combat. After that point, the sides changed their hostility from an active one to a more passive and cold one. This lasted for centuries, until Lolth struck again with the events of the Harbinger Coup.
The Drow who had sought refuge with Jenova were allowed to stay, but Lolth turned her focus to her followers in the Underdark. She made it clear that she would immediately kill anyone she thought may be heading for the Shadowfell.
Meanwhile, the overwhelming number of refugees was too much to handle in the Shadowfell. Jenova sought another solution, which led to her making a deal with Queen Ana II of Stin Cepel which ended the Shadow Wars.