The Jim Henson Incident

The Jim Henson Incident (or "Incident D-04.5) was the defining incident for Earth-Sesame. It is due to this that the sentient Muppets were created, and thereafter gained control of Earth-Sesame.

The Incident's Origins
Jim Henson was a practitioner of Dark Magic and the creator of many puppets (which he dubbed "Muppets"), along with one of his partners, Frank Oz. They hosted a TV program titled "The Muppet Show", using magic to animate the currently-inanimate puppets. The show steadily grew in fame, with hundreds of viewers across the globe (which was at that point called Earth D-04.5).

The Incident
At some point along their careers, Jim and Frank began to disagree with the way things were run on The Muppet Show. Frank was becoming "increasingly nervous" about Jim's continued use of Dark Magic, even as Jim wanted to create more Muppet characters, which would mean the use of more spells. The two had what Jim called in his journal a "heated debate", and split paths, Frank leaving The Muppet Show and Jim altogether. Enraged by this, Jim created a mass amount of new, never-seen-before Muppets, determined to bring the show back to it's old glory (many viewers had quit the Muppet Show after Fank had left)."WARNING! The rest of the article is comprised mostly of speculation and guesswork."After creating the Muppets, Jim used a ritual that was probably intended to animate the new Muppets all at once, under his control. Most likely, something in the spell backfired, killing Jim and giving life to the Muppets. Fully able to control their actions now and under the leadership of Kermit the Frog, they began to conquer the continents systematically, most likely killing all that opposed them (though some theorize that those that resisted were used for darker purposes).

Having successfully conquered the entirety of Earth D-04.5, the Muppets began to "reshape" their world through unknown means. After the Earth D-04.5 had been reshaped, it resembled a "flat earth" with it's sided dropping into the void. The towns and cities were all reshaped to resemble the backdrops and houses commonly used by Jim Henson, with some variations. The few remaining humans left were then left to themselves, though most of them went to the major cities and took menial jobs there.