Sansha's Nation was founded more than a century ago, shortly after all the empires had come into contact, just when space exploration and colonization was taking off. Sansha was a Caldari tycoon that carved out a sizeable piece of space for himself. There, he set out to create an utopian state.
His vision and charm attracted thousands of people and for some time the Nation flourished. But Sansha became ever more warped as his success increased. He started experiments, combining capsule technology with the human mind, creating zombie-like creatures that had the cold, calculating mind of a computer, but the ingenuity of humans.
When this became public knowledge Sansha was condemned and the other empires joined forces to bring him down. His forces were decimated and scattered to the winds. Remnants still remain far in the outer regions, but the once glorious Nation has been reduced to pirates and pillagers.