The foundation for Skien's power and wealth was laid with the Dags family at Bratsberg

At the end of the 11th century, a class of merchant chiefs established themselves on Bratsberg. The first one we know of by name is Dag Eilivsson. In 1102, he and his men accompanied King Magnus Berrføtt on a campaign to Ireland. Around 1110, the church on Kapittelberget was built. It was a crypt church that was probably inspired by Irish church buildings. A few years later, around 1115, the Benedictine monastery on Gimsøy was founded. One of the monastery's first abbesses was Dag's daughter Baugeid.

In the 13th century, Gimsøy Monastery became an important institution that not only acquired properties northward throughout Telemark, but also acquired properties across the Outer Oslofjord to Ranrike, today's Bohuslän in Sweden. It therefore continued the contact that seems to have existed across the Outer Oslofjord already in the Bronze Age.

This contact across the Outer Oslofjord was also emphasized by Dag's son, Gregorius Dagsson, who became a liegeman for King Inge Krokrygg. King Inge was severely disabled and his power was challenged by his brothers Sigurd and Øystein. Gregorius first killed Sigurd in Bergen and then defeated Øystein in a battle in Ranrike in 1156. Gregorius became the uncrowned king of Eastern Norway from then on and the political center of power in Eastern Norway was at Bratsberg.

When Sigurd's son Håkon later claimed the crown, he was defeated by Gregorius in a battle at Konghelle in Ranrike in 1159. But two years later, Gregorius was killed in a battle near Oddevoll, today's Uddevalla. He was then buried in Gimsøy Monastery.

The same year that Gregory died, 1161, also saw the death of King Inge Krokrygg, for whom he had been guardian. This sparked a long-lasting civil war in Norway between the Baglers, now led by the new king Magnus Erlingsson and his father Erling Skakke, and on the other hand the Birkebeiners, who supported their king-subject Sverre Sigurdsson.

In 1179, Erling Skakke fell in the battle at Kalvskinnet on the outskirts of Nidaros and Trøndelag became Sverre's center of power. In 1180, Sverre won another battle at Ilevollen near Nidaros. In the decisive naval battle at Fimreite in the Sognefjord in 1184, Magnus Erlingsson and 2,000 of his men fell.

This is the first time Skien is mentioned in written sources.

In the Battle of Fimreite, it is said that the Baglers threw whetstones that they had brought with them east from Skiða. This is the first time Skien is mentioned in written sources.