The Books of the Dead were created by the Deceivers, followers of the goddess Kina. The knowledge within them was granted to the Deceiver priests directly from Kina, and potentially possess the knowledge necessary to free her from her prison on the Plain of Glittering Stone, although they are never used.
After the Books were written, Rhaydreynak, emperor of the land that is now Taglios and the Shadowlands, launched a crusade against the Deceivers, killing them wherever they could be found. Some Deceiver survivors escaped onto the Plain, to protect themselves and preserve the Books of the Dead, and eventually the Deceiver saint Mahtnahan dan Jakel killed Rhaydreynak with a silver rumel. However, no one in the home-world who knew where the Books were hidden survived Rhaydreynak's slaughter, so the Books were considered lost. The Books were stored in the ice caverns below the Fortress With No Name at the center of the Plain, where they remained for hundreds of years.
The Daughter of Night, through Kina, was able to read the books without physically going to the Fortress. She painstakingly worked to transcribed all three of them, but she was constantly on the run, so she was frequently interrupted and her books destroyed. The original Books are eventually burned by Sleepy when she reached the fortress to free the Captured.
Although the originals were destroyed, the entire text was perfectly memorized by the Khadidas (an entity which possessed the body of Goblin). When Tobo's Unknown Shadows discovered and reported this, the threat of the Books being rewritten was understood to be very real. The Books of the Dead were lost forever when the Khadidas was neutralized long enough for Croaker to orchestrate the death of Kina.