Azshara was a young Night Elf female, that with her mastery over magic, became Queen of the Night Elf civilization.  Her elite guards and servants became the only ones to tap directly upon the Well of Eternity.

Those serving Azshara were separated from the civil Night elves with the name of Highborne or Quel’dorei.  Their experimentation of the Well of Eternity made them master it over the years.  With the arcane magics of the well, the elves were able to control the molecular structure of trees by blending and merging them into forms their minds shaped them to take, creating masterpiece buildings, housings, and other structures to shelter their civilization.

The Palace of Azshara was built on the Well of Eternity.  As their civilization expanded, destroying other Troll tribes in the Middle Jungles, and to the west, and as the Aqiri was crushed and sealed in Southern Silithus, and Nerubians pushed to the northern lands(Northrend), the obssession of Azshara and her highborne grew stronger.  They wanted to purify the world of Azeroth of all lesser races, and even their own race.  Their goal was to leave only the Highborne alive to initiate a new golden age.  To this goal, they amplified a spellcasting on the Well of Eternity, seeking more power.

By accident, Sargeras felt the intensity of the magic of the Well of Eternity upon a small world.  Sargeras made contact with Lord Xavius, counselor of Azshara.  Sargeras convinced them to allow him to be their god in exchange of power, promising he would purify their land.

Mannaroth and Hakkar the Houndmaster entered Azeroth, heralding the arrival of the Burning Legion.  Azshara was a selfish, arrogant and her vanity rivaled her thirst for power.  She allowed the Burning Legion to kill all night elves not member of her Highborne.

Malfurion sensed a wrongness in his dreams which became a constant nightmare.  Telling Cenarius of his nightmares, Cenarius was convinced that Malfurion was experiencing precognition abilities, and deemed him ready to learn the ways of the Emerald Dream.  Once in the Emerald Dream, Malfurion was able to seek the source of the wrongness down to Zin-Azshari—within the palace of Azshara.  That is how Malfurion knew the truth about Azshara and the Highborne’s plans and for weeks, Cenarius and Malfurion built an army of Night Elves and Ancients to battle the demons.

Malfurion destroyed the Well of Eternity in an attempt to halt forever the portal that would allow Sargeras to enter Azeroth.  The implosion of the unstable portal within the Well of Eternity caused a cataclysmic earthquake that sunk the middle jungles and the surrounding lands.  The sea rushed in from around the huge Ancient Kalimdor continent to fill the void.

The sundering of the land divided the huge Continent created ages past by the Titans and their servants: Earthen(Dwarves) and Sea Giantsj—separating different lands of the continent into smaller land masses known later as Western Kalimdor, Northrend, Lordaeron, Azeroth, Undermine and other islands.  Where once there was only one massive continent, now there existed 4 minor continents.

After the implosion of the Well of Eternity, massive earthquakes ravaged the middle jungles, risen volcanoes spouted lava and ashes.  The earthquakes sundered the land underwater, while volcanoes blackened the athmosphere, blocking sunlight upon Azeroth.  For 8 milennia, the world was in darkness.  The Well of Eternity became into the Maelstrom, a chaotic storm of arcane magic.

The Highborne and the Queen Azshara had undergone a transformation as the corruption of the Well of Eternity transfigured them to become adapted to their underwater surroundings.

Azshara, the most precious of female elves, became a monster.  Azshara is 20 feet tall, her skin has thick scales from her torso up.  Her legs transmuted into five octopus-like tentacules.  Her hair became living serpents(Like Medusa) and from her torso, four arms serve as tools to grab and throw javelins, however,. some of her javelins cast an electric charge upon her opponents and can shoot a dark ink spray upon enemies to blind them, while she makes her escape or to engage her enemies from a more treacherous angle.

Her loyal Highborne elves became the Naga.  Their body became reptile-like, growing scales.  Their legs turned to long tails that allow them to swim with efficiency underwater.

Azshara reigns her underwater kingdom from her former Zin-Azshari, now known as Nazjatar.  According to the Art of World of Warcraft book, found in the World of Warcraft Collection, the palace of Azshara is a structure atop a base in shape of a snail-like octopus.

References:

War of the Ancients: The Sundering
Warcraft RPG: Shadow & Light