backstory design advice:
1.Backstory is always optional, but may provide valuable hints. Try to minimize backstory where it doesn't belong(such as adding cinematics or interrupting combat loop. Always allow skipping everything. Repeat forced reading of backstories isn't immersive.)
The proffered form is text or voice-acting dialogue, not cinematic sequences or flashbacks to the past(while it looks cool once, it waste space and interrupts gameplay)

2.Backstory is localized in space and time, its basicallyin-world folklore - not factual information that is given by NPCs. Legend isn't storyline, but storyline can reference it.
Avoid adding backstories that look like a second storyline(wasted effort).
Don't add backstories to abstract things like Skills or perks, they are part of ever-changing game mechanics and should be factual/brief descriptions.(Backstories can be optionally added to game website about anything that doesn't have a backstory in game without adding content to the game, plus it can edited anytime).

3.Places, characters, monsters may have a backstory with multiple sources(each biased from their own point of view).e.g. NPC X may have a backstory told from source A,B,C each adding bias and unique information. The player then creates a "complete picture" in their mind.
This is the proffered type of backstory, creating ambiguity and vague "feeling" about the past. Don't overdo multiple-versions(wasted effort) unless the backstory is really important element(area boss,key NPC,key end-game area,etc focus on most important backstories first).

4.Backstory doesn't have to be hidden in nested NPC dialogues: provide elements which expose the backstory in form of scrolls/books/inscriptions(read by player character), interactive quips from the character(remembering, recalling, complaints, recognition of something, dejavu, however this shouldn't be overdone for every area).

5.Lore and backstories of items: These don't work with randomly generated attributes. Only unique items should have a backstory or flavor text(preferred). In general the "legend of item X" should not appear on the Item X, it should be told by external means.

6.Class/faction/region backstories should be treated with caution as they form basis of smaller/less important lore(rewrites of lore should be avoided). Minimize and tend to be vague to expand lore in whatever direction you like, i.e. brief two-line descriptions with vague characteristics work much better when in the future you add NPC dialogue and lore elements. Region backstory influences smaller areas in ways that should not be defined in region backstory, but inside quest/storyline lore.