Actually Eldia lost because of a plague, they split apart and then Marley pushed their shit in. They decided to retreat to Paradis and King Cuck built the walls and then brainwashed everyone to forget what happened because he thought it would save his people from further atrocity. When it didn't, he just fully cucked out and decided to fucking starve them, torture them and slowly murder them because its 'what they deserved'.
The peace deal fucking sucked, which is why King Cuck is the worst character in the series because if he just nutted up and said, "If you don't leave our island alone, we're going to fucking wreck your shit again." He was self hating and deserved a more painful death.
Again, they're caricatures. What have the Eldians done in 200 years? Nothing. Sit in the walls. If King Cuck let them have their fucking memories maybe nobody would try to go out there. Instead Marley treats it as a concentration camp and constant punishment for a war they lost like 400 years ago. At some point you just gotta go, "Bro, just let them have the island and blockade it." The don't act like rational human beings. Why should I feel compassion? Its part of the reason people got behind Eren's retarded genocide idea, because the story just makes it the only conclusion possible. Eren still could have taken his time, done tactical strikes, worked it out with the scouts, and reduced the world's level of technology to below Paradis'. They could have stolen the world's tech. Then went, "We're not going to conquer you, but stay the fuck off our island or we'll come back and burn you to cinders." A story leading to pure genocide of humans, which we can understand, doesn't strike me as realistic. Isayama had to make the people of the world like they were in order to force it. It suspends my disbelief because rational humans don't act like that.
There is no rational basis for the extreme hatred and persecutions, there just isn't, unless you had another titan like the founder just brainwashing the populace to hate Paradis. People have been mortal enemies, killing each other and putting them in camps and 50 years later their shaking hands. Here they've been torturing, starving and killing Eldians for centuries. There's not a rational basis for this.