In ancient times, the keeper Mimiron had discovered kaja'mite and, attempting to determinate its properties, he experimented on various races. He found that the ore was extremely potent and that it increased the intellect of his subjects. One of these subjects was a small primitive life race that roamed around the forests near Ulduar. By consuming kaja'mite, they were transformed into a new, highly intelligent race known as the goblins. The goblins share a common ancestor with pygmies.
During the War of the Ancients, Neltharion created the Demon Soul with the help of goblin artificers led by Meklo. The goblins also fashioned adamantium plates to hold Neltharion's body together when the Demon Soul's power began to overwhelm him, and the enslaved drogbar placed those plates onto his body.
When the Great Sundering happened thousands of years after the goblins' creation, they were cut from their supply of kaja'mite ore. In just a few short generations, most changes and boosts to their intelligence vanished. The goblins then took refuge on the Isle of Kezan and they had already forgotten the influence kaja'mite once had on their society.
After the Sundering, the Zandalari trolls that once ruled a large part of Azeroth started exploring numerous islands that dotted the newly formed sea. During one of these trips, they discovered Kezan and the goblin race, who were very primitive but still possessed some intellect. Initially the two races kept a distance as the Zandalari only came to the island in order to mine kaja'mite. They didn't really know too much about it, but they realized that is was very potent, so they saw it as a sacred component in their rituals and ceremonies.
For many centuries the trolls mined and occasionally even paid goblins in trinkets in order to work for them, but this arrangement was soon to change. At some point the trolls, while digging, discovered that Kezan possessed an unimaginable deposit of kaja'mite underground, more than they would ever need. So rather than digging themselves, they enslaved the goblins and force them to drill in frightful conditions. For thousands of years the goblins, too weak to resist, suffered under the rule of the Zandalari.
Finally, it was kaja'mite that led the goblins to their salvation. Over time, the goblin workers breathed in the dust of the ore that clouded the mines they worked in and eventually it started to awake the goblins' intelligence. Secretly they plotted to start a rebellion, gathering any materials they can find and hide in order to create a wide range of weapons, traps and explosives. One hundred years before the opening of the Dark Portal, the troll overseers were caught completely off guard, when goblins masses stormed out from the mines, armed with technology that the Zandalari couldn't even imagine at the time. The trolls' hold over Kezan was shattered completely, their mining operation failed and the surviving Zandalari fled. The goblins were now free and in order to celebrate their liberation they turned on each other, creating chaos as countless allegiances were formed. Soon enough they were split into various different groups, and the most powerful of these groups were known as cartels. As the battles were getting completely out of hand and no one was actually winning, the cartels brokered a truce. However, the conflict would never really cease as the goblins would now turn to trade, battling in the economic arena. For the years to come the cartels were rivals, constantly outshining and outsmarting each other as they continued in their quest for wealth and power.
With their newfound intellect, goblins became renowned for producing a number of ingenious inventions. Eventually, kaja'mite supplies ran low and as the goblins' heightened intelligence vanished, their inventions became increasingly unreliable. As a result, the goblins turned to mercantilism as a source of income and transformed Kezan into a profitable trading hub.
By the time of the First War, the goblins of the Steamwheedle Cartel had taken over a Stranglethorn Vale settlement named Blackwater Cove that had been abandoned by Stormwind after it was overrun by trolls. Upon claiming the town as their own, the goblins renamed it Booty Bay.
Approximately four years after the Second War, the goblin city of Gadgetzan had already been built in Tanaris on Kalimdor, as it was visited by Greydon Thorne. By the time of the Battle of Grim Batol, Deathwing also still had goblin servitors, just as he did during the War of the Ancients. The three known ones were Kryll, Nullyn, and Voyd.
Presently the goblins of the Steamwheedle Cartel offered their services to the Alliance and Horde across the world. The Venture Company, however, began hostile campaigns in various territories, prompting various conflicts with the two factions.
Several goblins joined the Dark Horde stationed at Blackrock Mountain and its surroundings (and some the actual one).