From The Heretic Knowledge Vault
A defining event in the history of the Poe-verse. Specific details are unknown, except that the Mage/Priest wars were fought between Tsuiraku and Veracia. They began when Shiro Hideaki, a mage from Tsuiraku, attacked and attempted to siphon the power from Luminosita, the Veracian god-construct. The whole process, aimed at resurrecting Shiro's dead wife, ended in his death -- probably.
The full outcome of the Wars isn't clear, but since Tsuiraku was able to invade and steal several books from the Vault of Heretical Knowledge, they were most likely victorious. According to Professor Yukiri, relations between Tsuiraku and Veracia remain strained as a result of the Wars.
Mentioned here. Later, during Ian Samael's bombardment of Emerylon, a war between Tsuiraku and Veracia is referenced. While it's not called the "Mage/Priest Wars" on that occasion and may refer to something else, the odds are pretty good that it's the same conflict.