The Civil War, also playfully referred to by the "dormice-like" Time Lords as the terribly un-civil war, was the first civil war in Time Lord history, fought between the supporters of the interventionist, warmongering would-be Lord President Morbius and a more traditionalist High Council of Gallifrey. Both sides recruited reinforcements from the rest of the universe, who understandaly felt rather concerned by the outcome, as it would determine whether Morbius would be allowed to use Gallifrey's power and resources in a war of conquest on the Spiral Politic.
Morbius was a Patrex Councillor on the High Council of Lord President Pandad, Rassilon's direct successor. He advocated for a more equalitarian and interventionist Gallifrey and amassed a cult around his person, until he felt in a position to demand the Presidency.
Accounts differed on whether Pandad simply exiled Morbius's (PROSE: The Legacy of Gallifrey) or if Morbius succeeded in getting the Presidency for a time, beginning his campaign agains the universe, only to be backstabbed by his High Council and exiled. (PROSE: Warmonger) In any event, Morbius escaped his exile, and, travelling through Time and Space, massed his Cult into an "army of evil" with which he returned to Gallifrey, intending to take the Capitol by force of arms. (PROSE: The Legacy of Gallifrey)
The war dragged on for many years and claimed the lives of untold numbers of Time Lords, Gallifreyans, and other sentients; (PROSE: The Legacy of Gallifrey) planets involved in the conflict included Fangoria, Romark, Darkeen, Martak and Freedonia, which provided troops for Morbius, and Sylvana, Zandir, Tanith and Electra, which fell to him. (PROSE: Warmonger)
Opposite Morbius's patchwork army was, in one account, Gallifrey's own army, still including more Gallifreyans than Time Lords at that point in time, which was personally led by Lord President Pandad. (PROSE: The Legacy of Gallifrey) In another account, the High Council, uncomfortable with being seen to act directly in the universe when this was precisely what Morbius said should be done, chose to fight the War against their rebellious child by proxy.
The Fifth Doctor, who had travelled into Gallifrey's past, was appointed "Supreme Coordinator of the Alliance Battle Fleet" and directed an unlikely army of humans, Draconians, Cybermen, Ogrons, Ice Warriors and Sontarans against Morbius, with the Time Lords merely providing the Doctor with financial support and a flagship. (PROSE: Warmonger)
In the end, the last of Morbius's forces were forced by the last of Pandad's to the planet Karn for a final clash during which the better part of both armies died, as did Karn's native population. The only local institution or popuplation to survive the clash of Time Lords was the Sisterhood of Karn, (PROSE: The Legacy of Gallifrey) who had originated on Gallifrey itself, (PROSE: Cat's Cradle: Time's Crucible) and helped the Alliance defeat Morbius, (PROSE: Warmonger) who throughout all these events was still in his first incarnation. (TV: The Brain of Morbius)
The trial of Morbius, planned to be a wholly performative act with the outcome (execution via a dispersal chamber) being decided in advance, was held on Karn shortly after the pyrrhic victory of the High Council's forces. (PROSE: Warmonger) However, it went horrendously wrong as Lord President Pandad fell to his death from one of Karn's treacherous cliffs even as he was about to pronounce Morbius's sentence. In the confusion, (PROSE: The Legacy of Gallifrey) Mehendri Solon, one of Morbius's human followers, spirited his brain away (TV: The Brain of Morbius) before Cardinal Helron, of Pandad's High Council, managed to action the machine and disintegrate Morbius's body.
Helron proclaimed himself the new Lord President of Gallifrey. To preserve stability, he made some concessions to the more approachable aspects of Morbius's political movement. Using the Elixir of Life the Time Lords could now obtain thanks to an uneasy alliance with the Sisterhood of Karn, more Gallifreyans were granted the gift of regeneration. Furtheremore, Helron made sure all Chapters would be now be represented on the High Council. It was however decided, to prevent dangerous friction, that the Lord President and the Chancellor would always be of the same Chapter.
As Helron was not of the same House as then-Chancellor Azmeal, he was dismissed. This allowed Azmeal to sink deeper into his study of the secrets of the Matrix, setting him on the path which would one day make him declare himself the first true Renegade Time Lord. (PROSE: The Legacy of Gallifrey) Meanwhile, another future Renegade, the Master, who had previously been involved in field work, was called back to Gallifrey against his will as part of a general effort on the part of the new government to pull back from any involvement in the affairs of the outer universe. He was assigned as a teacher of mathematics and computer science at the Prydonian Academy for a time. (PROSE: CIA File Extracts)