Dragons, also called the Creator race, are believed to have created Rivellon and many other worlds in the Divinity Universe. Dragons have been spotted since the time Elves ruled the land and since then they have found worthy champions in the Humanoids of the world.
Who the first Dragon Knights were is unknown though it is hinted they were Elves, but since Humans came to power in Rivellon the Dragons have chosen them as their preferred Champion.
Over the years, true Dragon sightings became increasingly rare to see and soon just disappeared completely - save for those few unlucky adventurers who ventured too close to a Dragon's lair. Since then, the Dragon Knights have been mistaken for true Dragons and have therefore also been named that. Both Dragon Knights and Dragons have dwindled in numbers since the death of the Divine by the hands of a Dragon Knight, hunted by Dragon Slayers. The Slayers have never brought down a fully grown Dragon, due to them thinking the Dragon Knights are true Dragons. Many small Dragons have been captured by the Black Ring as well and have been drained of their will and serve as mounts and defenders of the Ring's Black fortresses.
Fully grown Dragons however are still rare and are presumed to be resting in their lairs (as with the Patriarch) but by their own words, shoud be ready to come out in another year or a thousand - maybe.