Humans hunted dragons and there was constant warring between the two species. Finally, the Lord of all Dragons, Ninnurtu, gathered the noble Ebebu dragons and the foul Salmu dragons and used the combined power to create Tammabuku, their own world in which they could have peace. However, the Salmu dragons (evil dragons) soon stole the gems of the Ebebu (good) dragons, which was the source of all dragon's power. Ninnurtu, was powerless to stop them, since creating the new world left him powerless. The player is the last of the Ebebu dragon, and he/she has to win back all of the gems the Salmu dragons stole.
Source: Wikipedia, "http://en.wikipedia.org/wiki/Combat_of_Giants:_Dragons," available under the CC-BY-SA License.