The widely accepted version of Dark Souls lore goes like this: Pygmy created humanity as direct opposition to the Lords, and Humanity is the Dark Soul. There is one problem with that theory, and it's the Age of Dark. This is an attempt at an alternate theory.
Age of Dark, Age of Man[]
The intro estabilishes Age of Fire as something positive; it clearly shows a human city when the words "Thus began the Age of Fire" are spoken, implying that Age of Fire equals civilization. Conversely, when intro talks about Age of Dark, it shows a graveyard, Anastacia grabbing fading embers, and a corpse. Furthermore, we are told that Curse of the Undead is a result of Age of Fire ending and Age of Drak beginning, and it's a curse that only affects the living(obviously) which humans are(obviously).
Therefore the Age of Dark can't be literally the Age of Man, because humans are the ones who are suffering the most because of the coming Dark. "Outside Lordran, the Undead are accursed creatures" and we know at least one human kingdom(other than Lordran) outright fell because of the Curse. How is this supposed to be the age of humanity?
Pygmy and the Dark Soul[]
Expanding on the above, if Age of Dark fucks humanity over, and Pygmy is the main perpetrator of it, then it's hard to imagine humans are Pygmy's creation. Its just self-contradictory - why create humanity only to watch it slowly die out as the Age of Dark approaches?
There is also some doubt that Pygmy is Manus. The description of the Soul of Manus clearly states that "The owner was clearly once human". I don't know what "They" mentioned in the intro are but they sure as hell ain't humans. We could take the "Pygmy created humanity" theory to the extreme and simply assume he was the FIRST human to make the soul description work, but that still doesn't explain the obvious lack of compatibility between humans and the Abyss - Abyss is lethal to all living things, even the Undead, and even siply living close to the Abyss can have disastrous consequences(Oolacile).
Instead I put forward another theory: Furtive Pygmy is not creator of humanity, but rather of the Curse of the Undead, and that the Dark Soul is the Curse itself.
Kaathe and Frampt[]
Two snakes tell two stories. Since the stories seemingly don't add up, and because most players met Frampt first, this created an air of paranoia about snakes and Frampt in particular in the Dark Souls community. You can hear that Frampt is lying, that Kaathe is lying, that both are lying, that everyone in Drak Souls is lying and can't be trusted, and even that the entire Chosen Undead prophecy is a lie.
Two snakes tell two stories. Or maybe simply one story, just from two points of view?
The Theory[]
Kaathe tells you that Furtive Pygmy found the fourth soul, the Dark Soul. What a surprise - the game is called Dark Souls, and in it you play as a Cursed Undead. Furthermore, human Undead are branded with a Darksign, which could be another Dark Soul hint.
The reason why Kaathe calls Age of Dark the Age of Men is because humans are best targets for the Curse. They are the most powerful beings in Dark Souls universe after the gods: combine the human resourcefulness and intelligence with immortality and resilience of an Undead, and you have a Dark Lord recipe. You certainly wouldn't get a Dark Lord out of an Undead Rat... similarly, that's the reason why Gwyn was "in dire fear of humans" - he understood their potential as Undead, and what the Undead Curse meant - that Age of Fire is ending, and Pygmy is making his move.
Finally, the reason Pygmy is called your "progenitor" is because he is the creator of the Undead Curse, not humans; Kaathe is referring to you as an Undead, not as a human.
(note to all the amateur linguists: the modern meaning of "progenitor" is basically "precursor" and does not necessarily imply biological relation; "Furtive" means "Secretive" and "Pygmies" are not ancestors of homo sapiens sapiens. "Furtive Pygmy" essentially means, pardon the crude language, Secretive Midget)
Realizing that he cannot stop the Undead Curse, Gwyn - or gods in general - decided to also bet on the black horse, creating the Chosen Undead prophecy. After all, an Undead powerful enough to defeat Gwyn and become a Dark Lord would also be powerful enough to Link the Fire again, extending the Age of Fire. And how it plays out in the end is the choice of the player.
Dark and hte Curse[]
An important distinction must be made between Dark and death. Fire represents both life and death; the game gets this point across beautifully by letting you fight both the Witch of Izalith in the form of Bed of Chaos(called "bed of life" in the Lord Soul description), and Nito, the god of death - and despite being supposedly polar opposites, both of them found the Lord souls within the First Flame.
Dark as far the Dark Souls unvirese is concerned is the opposite of Fire. If Fire represents life, death and change, the Dark is essentially perfect nothingness. It is, again, well represented in the game - Abyss, which is the purest form of Dark, is just pure darkness in all directions, without sound or sense of space.
The Undead Curse is a physical manifestation of the Dark(thus nothingness - note that the process itself is even called Hollowing). The Curse slowly empties the humans out of everything they are - personality, mind, and even souls. As an example, all "healthy undead" as Crestbro calls them in the game give 1k souls or more and at least one Humanity, while the Undead in Undead Burg, who are almost completely Hollowed, give only 20-80 souls each and you can only get fragments of Humanity from them. The Curse - Abyss - sucks them out like eggs.
Timeline draft[]
- Age of Ancients
- Four beings from the Dark find the souls of Lords in the First Flame
- Three of them become Nito, Witch of Izalith, and Gwyn; one finds the Dark Soul and becomes Pygmy
- Three Lords wage war on the Dragons and defeat them with the help of Seath; Pygmy goes into hiding and bids his time
- Age of Fire starts; Gwyn gives part of his soul and title of Duke to Seath for his help against the Dragons
- Witch of Izalith tries to recreate the First Flame which ends up in demons; Gwyn intervenes, part of his Silver Knights become Black Knights fighting the demons
- Presumably a lot of time passes
- Age of Fire beings to end; Pygmy creates the Curse of Undead
- Undead, Undead everywhere
- Gwyn tries to placate or control the Undead outbreak, creates New Londo, gives Four Kings part of his soul
- Four Kings succumb to Dark, New Londo falls, is flooded
- The Age of Fire is ending, Gwyn creates the Chosen Undead prophecy and Links the Fire
- Presumably a lot of time passes
- Game begins