The draconiths and Kragnos’ people were kind of neutral to each other because they fought off the dragon ogres together, and though that didn’t lead to any formal alliance they both were otherwise peaceful cultures that went “those guys are alright, we don’t have to worry about them”.
Kragnos personally turned on them with his band of murderous allies because he’d run out of other things worthy of a fight, and their fighting back killed his friends (which made him get so made he started committing infanticide on them, and they in return started fighting his people because they assumed it was a horrible genocidal war rather than one guy who sucked). That’s where his genocidal hatred of dragons comes from, making his friends fight an enemy that killed them in self defense