I'll try to keep this simple
First, I'll start with the premise that the island is a sentient entity. Due to it's massive and unique energies it is aware of it's surroundings, much like your brain is with it's complex system of chemical and electrical signals. These energies allow the island the ability to manipulate small amounts of time and to communicate in a limited manner telepathically.
Using it's telepathic influence it draws to it an ancient race of people who cultivate the island, worship it even, and become it's protectors.
The island also protects itself via its ability to manipulate time/space, seeling itself within it's own bubble of time/space. The bubble spins around the present like a record, sending the island forward and backwards through time, thus keeping it hidden and protected from the outside world. This also explains how items arriving on the island will sometimes arrive before they left the real world, and other times they will arrive much later.
As in the real world, the only 2 political philosphies that can ever exist emerge. Those are the ideas that man is inherently good, or that man is inherently evil. If you believe man is evil, then you support strong measures of control, whereas if you believe man is good, you support free will. Control of course leads to tierany & totalitarianism, while free will leads to anarchy.
The island grants 2 men with the longevity to maintain order on the island, and of course those would ben Jacob and the Man in Black. But as time goes on, their competing philosophies turn to conflict.
The original ancient civilization destroys itself. The Man in Black isn't suprised, while Jacob begins his quest to prove that man is good, and to do this he brings others to the island.
It's untold how many civilizations, or at least groups were brought on by Jacob, and who eventually fell. It may even be that the Man in Black brought people himself, but was denied by Jacob in his attempt to control them, and thus they the people fell into chaos. There may have even been a time where Jacob allowed the Man in Black to do as he would, but he allowed his people no freedoms and in the end Jacob could not sit idly by.
In the end, The Man in Black decided there was nothing left to do but kill his immortal counterpart, but he was forbidden to do it himself and thus he began schemeing to have somebody do it for him. The best way to do that was to allow Jacob to bring whoever he wished to the island and then corrupt them to his will.
That's when Richard arrived, and the Others as we know them were born. Jacob established rules for these Others to live by, and their primitive lifestyle thrived.
But it was then that Jacob decided that his successful society needed 2 assurities in order to continue its success. It needed continuity, and assurance that Richard would not lead it as a dictator, and so Richard was made to merely advice a leader choosen by Jacob so that the society was assured of a rotating leadership, while Richard existed as a buffer between Jacob & the choosen leader, as well as a possessor of all Island knowledge.
It was the perfect system,
But the Man in Black had already decided he wasn't going to tolerate Jacob's medeling any more. If Jacob had torn down his societies in the past, he was going to tear down Jacob's, and he was going to insure that Jacob wouldn't interfere any further with his ideas of freedom. He was going to kill him.
And so the Man in Black decided at first to infiltrate the Others by using the decedants of another man he had met from Richard's boat. The latest generation of Hanso's had the capability to influence military action and at MIB's suggestion, came to island with military personel to test weapons.
Jacob's Others fought them, but it was all a distraction, because what MIB really wanted was to use Hanso further to set up the Dharma Initiative. Dharma indirectly would be MIB's own controlled society, and would exist to dominate the island. But MIB's real purpose was to have an ongoing presense that he could use to eventually infiltrate the Other's in order to convince just one person to kill Jacob. And in order to do that, he needed to place his own leader within them.
His first attempt was for that person to be Ben, and sure enough Ben made into the ranks of the Other's, overthrew it's current leader, and assumed a leadership of his own.
But Jacob did not trust Ben, because he knew that Ben was merely a device to be used by the MIB. With Richard's help, Ben never saw Jacob, but was coached to understand that this was simply the way things were. Yet Ben felt slighted and vengeful. This worked to both MIB & Jacob's advantage, as MIB saw this vengence and jealousy growing in Ben as the perfect weapon to use agaist Jacob.
What MIB didn't know, is that Jacob's plans were already in motion. Jacob had already foresaw MIB's use of Dharma and had set in motion plans of his own amongst them. He saw to it that their study of the island's time properties would set in motion a chain of events that would lead to the warping of the Island's natural time properties.
In preperations for this warp, Jacob had begun meeting with specific individuals he would direct throughout their lives to be in a certain location at a certain moment in time, and those people became the 815 survivors.
What is brilliant about Jacob's plan, is that MIB didn't know any better. He thought the Incident was just that, an incident, and he later thought Desmond's failure to push the button was simply destiny as he had already seen the presence of people from the future amongst his military campaign in the 50's. But the presence of the losties in the past was due to the unavoidable chain of events already set up by Jacob. His contingency plan.
Yet MIB bit into it. Seeing Locke he felt he had his man in place, and he used his influence to convince the current cast of Other's, and even Richard that Locke, not Ben, was their destined leader. This purpose was 2-fold as it not only fueled Ben's anger, but established Locke as the vehicle for MIB to opperate from. And so Ben was banished, replaced by Locke, and that's when Jacob's real trap swung.
Using Christian as his own vehicle, Jacob manipulated Locke, and indirectly manipulated Jack into flashing himself into the past where Jacob needed him to not only hide from the Man in Black, but also to accept his destiny. Meanwhile Jacob allowed Locke to fall into the perfect position of being murdered in order to allow the MIB to use him and think he'd one.
So Jack goes to the past, and MIB awakens in Locke's body, ready to manipulate the murderous Ben into one final kill against the one man he now blamed for his downfall, Jacob. And the plan it seems is carried out.
But Jacob's pieces are already in motion. Jack and company are now returned from the past via the incident. And now with Jack aware of his destiny, he has only to complete what he must do.
And that destiny is to kill the Man in Black. With both he and Jacob gone, they can no longer manipulate the lives of men on the island. The only option is for men to govern themselves, to live in freedom, and thus Jacob's ideals win out, if not Jacob himself. Jack will succeed Jacob as the mortal torchbearer for Jacob's political philosophy.
Now this may come about in serveral ways. Jack may eventually die for these principles, or he may be given immortality by the island as the island gave to Jacob in the beginning, and truly make Jack the successor to Jacob. Locke may be resurrected as a counter balance to Jack. Jack after all would fall closer to the Man in Black in philosophy, since they both desire manipulation, while Locke would more truly represent Jacob's ideals of letting the chips fall where they man. Perhaps for that reason the events I just described will happen in reverse, with Locke directly assuming the roll of Jacob's successor.
Either way, that is the istory of the island.