The Great Calamity (大災厄 Daisaiyaku ) refers to the supposed destruction of both this world and the Crimson Realm, which was said to occur because of the Crimson Denizens extravagant behavior in this world, especially the over-consumption of humans' Power of Existence.
Background[]
The theory was that as the two worlds were right next to each other, the collapse of this world due to loss of order would cause the destruction of the Crimson Realm as well. The Great Calamity hypothesis was first put forth and spread by a Crimson Lord with extremely sharp senses, who felt that the Distortion created from excessive hunting of Power of Existence was warping the Rift Between Both Worlds.
Some Lords felt the impending crisis and decided to kill their brethren in order to prevent further Distortions. In order to do so without creating Distortions themselves, these Lords formed contracts with humans, giving birth to Flame Haze, who would try and stop indulgent Denizens. The Denizens who consumed Power of Existence in this world thought of these Lords' actions as excessive and foolish as their entire basis was on the Great Calamity, a vague conjecture.
There were some among the two parties who had tried to reach compromises in the past, but now they only see each other as enemies. Even until the present age, perceptions regarding the Great Calamity is a cause of conflict among Denizens.
Xanadu[]
To solve the conflict between the two parties regarding the Great Calamity, "Snake of the Festival" Yūji Sakai proclaimed the creation of the New World Xanadu. Xanadu would have limitless Power of Existence and would block Denizens from crossing over from the Crimson Realm to this world. Snake of the Festival had said that these two properties of Xanadu, as well as migrating the Denizens there, would prevent the excess use of Power of Existence and thus the Great Calamity. However, according to the former teacher of Four Gods of Earth, Heart of Sky, Distortions were actually created as a result of the act of transforming people and objects into Power of Existence, in order to keep the total amount of existence in the world constant. If humans are overly hunted for their Power of Existence in the New World, Distortions would accumulate again and eventually the Great Calamity would occur.
Xanadu was created with the law that "Humans can't be eaten" due to Shana using an Unrestricted Spell Insignia to change the Psalm of the Grand Order, and as a result all the Distortion disappeared. As there was a law preventing the transforming of humans into Power of Existence, the danger of the Great Calamity had passed for the time being. However, the transformation of materials into Power of Existence might still be possible by using a method like the City Devourer, and loopholes could be found in the law, so it is thought that the possibility of the Great Calamity would never be zero.