The Awoken are descended from Humans, but they’ve been altered by what happened during The Collapse. As some people fled to reach the Reef and beyond there were killed, but some survived. It’s not known what exactly happened, whether something mutated those Humans or if something in the Reef altered their children, but the Awoken were born out of the carnage.
The Reef is where the Awoken have stayed, building the Dreaming City for themselves as well as the Tangled Shore in the Asteroid Belt. Most Awoken are detached from Earth and have no desire to return, but some did and they now fight for the planet and the Traveller, which is where the Awoken Guardians come in.
The Awoken are ruled over by The Queen and her brother Prince Uldren. The Queen ordered the destruction of Ceres in the Awoken effort to reclaim the Great Machine, an act which scattered the Fallen House of Wolves and brought their Kell, Skolas, under her control. Unfortunately Skolas began a rebellion the minute the Queen gifted him to the Nine, bringing about the events of Destiny 1’s second DLC. After these events the Queen opened up the Reef for all Guardians to visit and use in the war against the Darkness.
During The Taken War the Awoken responded before anyone, stopping Oryx and his army in Saturn’s rings. Here the Queen and her Witches unleashed the power of the Harbingers, mysterious weapons or beings of incredible power, destroying a large portion of the Dreadnaught. During the battle it seemed as though both the Queen and Prince Uldren were killed.
However, even without their leadership the Awoken aided the Guardians in fighting the Taken Blight, seeking out sources of Taken around the system and destroying them. The Reef worked with the Vanguard in setting up Patrols in order to find every last drop of Taken Blight, but even now in Destiny 2 there are Taken in the system.
Now as Destiny 2 Forsaken draws near we can see that Uldren Sov, the missing Prince, has returned. But he’s done helping the Guardians. At the beginning of Forsaken he will have led the Fallen House known as the House of Skorn against the Reef and his very own people. The Skorn will escape from the Prison of Elders and Cayde-6 will unfortunately die. At this point the Reef and Guardians will be working together in order to save their society from complete destruction, but not all of them are happy about it.
At the time of writing this is the key lore relating to the Awoken.
Image Source: GameRant