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Now to answer your question: Isles of Terra were created when Shikbath Zera crashed on ocean world of Terra, thanks to Sheltem sabotage. Shikbath Zera carried Varns to create islands on this planet but because of Sheltem not all of them safely landed, some were sunk.
This happened some time before MM1 events. After this disaster the Ancients sent Corak to capture, deactivate and bring back Sheltem for repairs to some distant (and unknown to us) Ancient base and to replace him as Guardian of Terra.
On the way back to Ancients Sheltem emerged, imprisoned Corak and landed on VARN 4. His only task (motivated by his first directive) was to return on Terra to "guard" it.
VARN4 was a part of CRON vehicle, which one of task was to deliver 4 Varns on Terra to replace lost ones.
We don't know which one Varns landed on Terra after MM2 ending but we know that CRON had more then just four Varns, as Sheltem launched Varn 6 into (Terra?) sun.
I guess Varns form MM2's Cron are none of islands visited in MM3 and we only explore Varns from Shikbath Zera.
I also think that both VARN4 and CRON weren't designed to land on Terra. Cron later left Minos System and went to unknown (to us) destination.