The Arcanum was previously a school for magic during the days of The Alammar Empire, heavily funded by the government. It's main goal was to reduce the sheer amount of fatalities that occurred because of failures during the process of learning spells. The school decreased the amount of deaths by quite a bit, and was officially made a public government funded institution in 900 B.S.
The Arcanum continued in it's activities for a bit before the beginning of The Splintering. This mass rebellion caused extreme tensions to erupt within the Arcanum, as loyalist tendencies were more concentrated here then in the outside world, as funding for the institute never stopped during Victor the Fourth's reign, most likely due to him never bothering to learn about the school, and never knowing that it was siphoning funds. Arguments and full-blown fights often erupted between students, and professors almost never intervened, arguing amongst themselves on what the better side was. These fights escalated more and more into fatal brawls, and the number of fatalities as a result of these arguments began increasing.
Tensions eventually erupted at the same time of the Splintering, causing a full-blown war to break out in the campus between rebel supporters and loyalists to the Alammar. The entire place was destroyed during the fighting, the conflict escalating more and more for about half a year, killing dozens. This conflict eventually subsided when the Arch-Magister of the Arcanum sided with the rebel supporters and ended up defeating the loyalists.
Following the collapse of the Alammar Empire, the Arcanum underwent massive reforms. It shifted from being a magic school to becoming a sanctuary for mages following the backlash the Age of Frost caused. It maintains it's school portions, though it has grown to have a whole city of magicians surrounding it's peak. It tries to be secret, but with so many people knowing about it, it's only partially a secret, with anyone being able to find evidence of it if they dig deep enough. While many have tried to lay claim to the Arcanum and it's land, the pure amount of magic users occupying the area, and the hard to assault mountains would make it a nightmare to attack.