And, this is what I came up with. It's mostly based on provided material (including Codex entries), but I added in a few of my own tweaks to smooth it all together. Enjoy!
Since it is only known as the Tower of the Circle of Magi these days, many people forget that the tower sitting in the middle of Lake Calenhad existed long before the Circle. Around 1800 Ancient, the Alamarri living around Loch Kin (what is today known as Lake Calenhad) broke away from the other tribes, becoming known as the Avvar. A combination of factors rapidly transformed the Avvar into a lakefaring society and drove the split between the Avvar and the other Alamarri tribes. The abundance of fish and the facilitation of trade provided an economic stimulus for this shift, while the beliefs of the Avvar provided a religious stimulus. The Avvar believed that Loch Kin was once the site of Belenas, the mountain which stood at the center of the world, from which Korth the Mountain Father surveyed the earth and sky, but that it was destroyed in the battle between Korth and the serpent Nathramar. The Avvar also claimed that those who drank from the waters of the lake were granted mystic visions, and so the lake became venerated by the Avvar.
The Avvar fought to prevent incursions by the other Alamarri tribes into the venerated and profitable Loch Kin region, leading to a number of coastal and naval battles between the tribes. During this time, the Avvar formed a brief alliance with an enterprising house of dwarves. These dwarves surmised that the waters of the lake were contaminated with lyrium, and that therefore a large deposit of lyrium might still lie below Kinloch Island. The dwarves and the Avvar collaborated in the construction of a temple fortress on Kinloch Island, which was called Kinloch Hold. In so doing, the Avvar established a symbolic and strategic capitol for their people, and the dwarves gained military protection while they pursued their mining operation. Despite the discovery of lava caves below Kinloch Hold, the mining expedition was ultimately futile, failing both to find lyrium and to connect Kinloch Hold to the Deep Roads.
After the departure of the dwarves, the Alamarri and the Avvar warred with each other for several centuries, with the Avvar eventually being routed from their settlements around Loch Kin and pushed westward into the foothills of the Frostback Mountains. Despite the loss of their coastal settlements, a tribe of Avvar maintained control of Kinloch Island for centuries to come due to the virtually impregnable nature of Kinloch Hold.
Between 500 TE and 650 TE, the Tevinter Imperium conducted four campaigns to subjugate the various tribes of Ferelden. During the fourth and final advance into the valley, the Tevinter Imperium held the western half of the valley long enough to extend the Imperial Highway across the Waking Sea and into Ferelden. It was during this campaign that the Tevinter Imperium finally conquered Kinloch Island and drove the Avvar back into the Frostback Mountains. The zealous Avvar defenders of Kinloch Hold fought to the last man, woman, and child, and the savagery with which the Avvar within Kinloch Hold were slain created a grim legend that lasted for many centuries.
Kinloch Hold was thought to be cursed until the Circle of Magi assumed control of it in 3:87 Towers, after the Circle's original tower in Denerim was razed. A hamlet on the lake shore operates a ferry to the tower, but visitors are few and far between. Most who come to the Tower of the Circle of the Magi now come either to learn magic or to warily watch over those who would learn.