Luigi used to live on H'Catha, the beholder discworld at the far reaches of Realmspace. While many attempted the challenge, Luigi was one of the few of his kind to successfully reach the summit of the Spindle, a 1,000-mile-high (1,600 kilometer) peak, interacting with each of the hundreds of "mind-readying stations" along the way. It was said that any being who succeeded, as Luigi did, would have their mind filled with all knowledge collected since the creation of the phlogiston. Luigi realized that the true purpose of the beholder race was to learn all that there was to know and to teach and share that knowledge as the supreme information brokers of the universe. It was even possible he'd discovered that the entirety of existence lay wholly within the minds of strange and unknowable beings beyond even the gods, beings who titled themselves "roleplayers".
In any case, Luigi's entire outlook—and even some of his inherent magical powers—were changed, and he returned to the surface a new beholder. So, of course he was soon scorned and shunned by his kin and, when they learned of his changed powers, he was forced to flee for his life. He actually crossed the Spindle a second time to get away.
He managed to find a human-run tradesman and convinced the crew to take him on and let him work off his passage. Eventually, they let off on The Rock of Bral, where he purchased his own tavern, the Happy Beholder. It was his patrons who gave him the name 'Large Luigi. He became a famous citizen and business-beholder of the city.