In the Dawn of Westeros, before the coming of man and the raising of castles and cities, there were only the Children of the forest. Little is known of them now, but it is said they were small in stature, dark and beautiful, and no taller than children when grown to adulthood. They lived in the depths of forests in hidden villages, crannogs and caves. They hunted with weirwood bows and armed themselves with blades of obsidian. Their wise men were called Greenseers and possessed a powerful magic. They worshipped nameless, faceless gods of the forest, stream and stone. According to legend, it was they who carved faces in the great white trunks of the majestic weirwoods, their deep-cut eyes red with sap and ever watchful.Twelve thousand years ago, the First men came from the eastern continent, crossing a land-bridge called the Arm of Dorne. Riding their great horses and wielding weapons of bronze, they cut down the Children's forests and weirwoods. A terrible war raged between the Children and the First Men that lasted for centuries. At long last, the two races sorted an end to the years of horror and bloodshed. They met on a small island, at the center of a great lake called the Gods eye. It was there they forged the pact. The First Men would be granted dominion over the coastland, the mountains, the highplains and the bogs, but the deep forest would forever belong to the Children and no weirwood tree would ever again fall to men's axe. To seal the Pact before the gods, the Children carved a face in every weirwood tree on the island, which came to be known as the Islands of Faces.But the Pact could not withstand the coming of the Andals - a race of tall, fair-haired warriors. They attacked with fire and weapons of steel, slaughtering the Children of the Forest wherever they could find them, burning out their weirwood groves, hacking away at the faces of the old gods, and spreading their own religion through the land. Centuries of war followed, and the Andals conquered every kingdom in Westeros, save one - the North. The Kings of winter were able to withstand the Andal invasion. The descendents of the First Men dwell there to this day and continue to worship the old gods. As for the Children of the Forest, those who survived the slaughter were said to have fled far north and have not been seen again. Most assume they’re long dead, and some don’t believe they ever existed. They live on only through song and legend, and in the faces of the weirwood trees.
Source: http://gameofthrones.wikia.com