Halcyon was a grim industrial planet in the Pegasus galaxy where the Wraith were not feared, but hunted; a unique Ancient structure known as the Dolmen generated a low-level psychic broadcast which reduced the Wraith mentality to a basically feral mindset, unable to conceive plans or effectively retaliate against oppression. The elite believed that the Wraith avoided Halcyon out of fear, but in reality this had more to do with Halcyon being on the outskirts of the Pegasus Galaxy, and therefor relatively far away from any territory that the Wraith might attempt to cull.
Ten thousand years ago, during the Lantean-Wraith war, a hive ship came to the planet to Cull, but the Wraith were kept from landing by the power of the Dolmen. The Wraith engaged Ancient forces in battle over Halcyon, ending with both sides suffering severe damage and the hive ship crippled. Unable to win the battle, the Ancients fled, promising to return with more forces to destroy the hive ship. However, they never did and the hive ship, who's hyperdrive was damaged beyond repair, was stranded in orbit over Halcyon. Unable to land and feed or escape to hyperspace, the crew began to go insane from hunger and the Dolmen and in desperation, entered hibernation where the Dolmen couldn't affect them and landed the ship on the planet on autopilot. Over the millennia, the hive ship became covered over with earth and trees and appeared to be a simple hillside.
According to Lord Magnate Daus, one of Halcyon's most powerful warlords, Halcyon was once an environmentally harsh planet where strength was necessary for them to survive, but his own ego may have coloured his description.
On their ongoing quest for new allies, Lt. Colonel John Sheppard's team traveled to Halcyon after a Hunter party helped the team- accompanied by a British Marine detachment- fight off a group of Wraith attackers, but Sheppard quickly became disgusted with the political machinations of Halcyon's aristocracy, many of them engaging in live war games with actual weapons on a regular basis simply because they could, and showing little real concern for the common people when a few simple changes in food and water production would be sufficient to deal with their health problems.
Meanwhile, Dr. Rodney McKay enlisted the aid of Erony - Daus's daughter, who showed more sympathy for her people than her father - to investigate the Dolmen, only to become caught in the political machinations of the planet when Daus attempted to force McKay to help him put some Wraith back in stasis. After Sheppard killed the Wraith Keeper, the Wraith on the derelict hive ship began to awaken along with all the other Wraith in the galaxy. Daus had found the hive ship and was using it as a source of his Hounds to serve as his private army, but the Wraith were waking up in greater numbers than they could cope with and Daus wanted McKay to put them back to sleep.
Although Scar - a Wraith elder, so named for the loss of his eye in a fight with Daus, who had managed to retain enough of his intellect to be a threat - was able to force the Atlantis team to destroy the Dolmen, the Wraith themselves were subsequently defeated and the hive ship destroyed thanks to the team. Just before the hive ship exploded, the people of the planet believed that another hive ship had arrived but were relieved to discover it was instead the Daedalus which rescued the Atlantis team and the surviving Halcyonites trapped aboard the hive ship. With Daus dead and the hive ship destroyed, the Atlantis expedition were able to provide the people of Halcyon with medicines and supplies to ease the sickness affecting the commonors, Erony - who had already harboured doubts about her peoples' way of life - beginning efforts to reform her people to adopt a more compassionate philosophy. Erony began planning to hold democratic elections while Doctor Carson Beckett was able to help the people determine that a frequent illness they called "bone-rot" was due to contaminated food and water supplies from low standards of living. Doctor Elizabeth Weir had the Daedalus off-load supplies meant for Atlantis to aid the Halcyonites situation and Daedalus engineers helped the Halcyonites come up with plans for a new irrigation system, water supplies and similar things to further aid in improving the planet's situation. (SGA: " Halcyon")