An excerpt from StarWars.com‘s oral history of Star Wars: Episode I – The Phantom Menace:
“The story for Episode I, dubbed “The Beginning” in early drafts and through production, would center around Jedi Knights Qui-Gon Jinn and Obi-Wan Kenobi, Queen Amidala, and their accidental discovery of a young slave named Anakin Skywalker. Meanwhile, a seemingly trivial planetary blockade would be the launching point of a secret Sith Lord’s plan to gain control of the Republic.
George Lucas [The Phantom Menace writer and director, Star Wars creator]: It’s all based on backstories that I’d written setting up what the Jedi were, setting up what the Sith were, setting up what the Empire was, setting up what the Republic was, and how it all fit together. I spent a lot of time in developing those elements, and what each planet did, and why they did it the way they did. So I had all this material. A lot of the story elements were givens. Early on, it was that Anakin had been more or less created by the midi-chlorians, and that the midi-chlorians had a very powerful relationship to the Whills [from the first draft of Star Wars], and the power of the Whills, and all that. I never really got a chance to explain the Whills part.
So a lot of the story of the prequels, I’d done already. And now I was just having to put it into a script and fill it in, kind of sew up some of the gaps that were in there. I’d already established that all Jedi had a mentor, with Obi-Wan and Luke, and the fact that that was a bigger issue — that’s the way the Jedi actually worked. But it was also the way that the Sith worked. There’s always the Sith Lord and then the apprentice.
Everybody said, “Oh, well, there was a war between the Jedi and the Sith.” Well, that never happened. That’s just made up by fans or somebody. What really happened is, the Sith ruled the universe for a while, 2000 years ago. Each Sith has an apprentice, but the problem was, each Sith Lord got to be powerful. And the Sith Lords would try to kill each other because they all wanted to be the most powerful. So in the end they killed each other off, and there wasn’t anything left. So the idea is that when you have a Sith Lord, and he has an apprentice, the apprentice is always trying to recruit somebody to join him, because he’s not strong enough, usually, so that he can kill his master.
That’s why I call it a Rule of Two — there’s only two Sith Lords. There can’t be any more because they kill each other. They’re not smart enough to realize that if they do that, they’re going to wipe themselves out. Which is exactly what they did.
In The Phantom Menace, Palpatine was the one Sith Lord that was left standing. And he went through a few apprentices before he was betrayed. And that really has to do with certain talent and genes that allow you to be better at what you’re doing than other people.
People have a tendency to confuse it — everybody has the Force. Everybody. You have the good side and you have the bad side. And as Yoda says, if you choose the bad side, it’s easy because you don’t have to do anything. Maybe kill a few people, cheat, lie, steal. Lord it over everybody. But the good side is hard because you have to be compassionate. You have to give of yourself. Whereas the dark side is selfish.
But anyway, there’s a whole matrix of backstory that has never really come out. It’s really just history that I gathered up along the way. So it seemed natural that when I had the technology to actually make the film – for example, I could finally have Yoda be the warrior he was meant to be — then I would move forward to thinking about how I could make that a movie. Because I had all the backstory, I had basically the three scripts. Or at least the material that was in the three scripts. Then it’s just a matter of doing the details.”
George Lucas’ vision of the galaxy’s ancient times is clearly different from the Expanded Universe. Many wars between Jedi and Sith in the Old Republic era were told in games, books and comics. The current Lucasfilm’s canon didn’t explore this era yet.