Ancient Times of War and Balance
What follows comes from Legends and canon materials, but until it is retconned I believe we can go with the mix. The early days of the galaxy had Jedi and Sith. Legends suggests Sith maintained the upper hand for more time, but canon suggests Jedi came first and held power longer. Either way Jedi and Sith were warring factions in the early days of the Old Republic.
No matter which faction held power, they remained in balance. One would gain a slight edge, but it would always swing back the other way. The force was in balance, so what changed?
We assume the force to be in balance at this point, but then came a nobody from nowhere that would radically change the ways of the Sith – Darth Bane.
Beginnings of a New Sith
Darth Bane was simply an up and coming Sith except for one thing. He realized the inherent problem of the Sith. Every time the Sith were on the verge of defeating the Jedi, the selfishness and greed of the dark side reared its dark head. Infighting amongst leader turned Sith against Sith, giving the Jedi a chance to regroup and strike back. Once again the Jedi and Sith would be even once more.
It was now that Bane instituted the most famous Sith Rule. “Two there should be; no more, no less. One to embody power, the other to crave it.” No longer would the Sith openly oppose and fight the Jedi. Instead the Sith would hide, plan and plot the end of their enemies from the shadows. Bane engineered the destruction of the Sith armies and went into hiding with his apprentice.
