Elayne is the reincarnation of the Egyptian princess Selene. Selene was from another kingom who were in war with Egypt. She got prisoned,
but she and the Prince Atemu felt in love. After the war was ended she stayed at the Palace and became the Princess of Egypt.
She and the Pharaoh Atemu would get engaged until the Priest Seto betrayed the Pharaoh. They both died in the fight.
Her parents and Pegasus were good friends, he was even on their marriage. But the friendship wasn't that long after Pegasus got the Millenium Eye from Shadi.
To bring back his beloved Cecilia he sealed people into the Shadow Realm and with the other items he would get even stronger. When he found out that the family Teineiki owned
a Millenium Item he planned to take it. Unfortunatly he was too late, the ceremonie to transfer the tiara to their daughter was already started.
So he sealed his "friends" into the Shadow Realm and prisoned Elayne. Because he couldn't take the tiara from her and only by winning it, he took her to his island and brought her to a cave similair to a Shadow Realm.
Elayne refused to fight against him, so she had to stay in the cave for the rest of her life. But if someone could defeat Pegesus, Elayne would be free