The upper classes of the Night Elves civilization were the favoured servitors of Queen Azshara whom she called the quel'dorei ("High Elves" or "Highborne"). They were ordered by their Queen to plumb the depths of the Well of Eternity for knowledge and discovered primitive magic. The reckless use of magic by the Highborne led to their slow corruption and addiction to the power it granted. The ripples sent into the Twisting Nether attracted the Burning Legion to Azeroth.
In the titanic war that followed many Highborne were seduced by the Burning Legion who promised them as much magic as they desired; many gave themselves wholly over to the Burning Legion and were transformed into the first Satyrs by Sargeras' minion, Xavius (A former Highborne leader himself). The Highborne tried to open a portal for Sargeras to to enter the world, however they were foiled by the efforts of Malfurion Stormrage and many Highborne were killed and smashed to the sea floor with Queen Azshara and transformed into the Naga.
A few Highborne survived and made their way with the rest of the Night Elves to Mount Hyjal where they helped rebuild the Night Elven civilization. However, many felt the pangs of their magical addiction and were tempted to use the power of the new Well of Eternity. After recklessly attempting to convince the part of Night Elf society to use magic by unleashing a terrible storm upon Ashenvale, the Highborne were exiled. The exiles landed in Lordaeron and became the High Elves; they remembered the mistakes of the past and used Runestones to shield the use of their magic from the Burning Legion and practiced magic with more care than their ancestors.
After the destruction of Quel'Thalas, a group of High Elves embraced their Highborne ancestry and resumed the reckless use of magic, including demonic magic. Kael'thas Sunstrider renamed his people as the Blood Elves, and fled to Outland with Illidan Stormrage. However many remained behind and began to rebuild their shattered city of Silvermoon.
Some original Night Elf Highbornes still exist, but the majority of them are now ghosts.