Naturally, Thanatos had scoffed at that. 'Their' new continent? The True Lords' allegiance was to power! To Death!
And so, they fought, with both sides taking heavy losses. Thanatos ended up crawling to the north where he created the Plains of Death to nurse his wounds, while Elysium had been severely weakened.
However, Elysium was still far better than the ruined Fallon, so they could have easily taken over using some righteous line.
So why didn't they?
Well, as long as one thinks about it, it wasn't too complex. There was a certain concept called politics that existed in the world, and it was the binding force of all parties, sentient or otherwise.
To understand, the Gods of Elysium had the power to technically curb stomp everyone and rule entire continents, yet they had never gone that far. Rather, they chose to rule indirectly or simply eradicate entire clans AFTER finding 'just' reasons for doing so.