Timeline

so, how did people appear on Antagarich back then...

and am I right in understanding that Varn is like a whole continent inside?
what exactly is Varn?

In what sense, not on Antagarich before? The colonization of the planet Enroth began with the continent of Enroth, where Varn landed in the south of the continent, where a flourishing land was formed. Later, the Dragon Sands desert appeared there.

and am I right in understanding that Varn is like a whole continent inside?
what exactly is Varn?

Varn is something like a "world ship," with entire continents inside, even with seas. They have artificial suns. The "cargo" of the Varns consists of various biomes (planet simulations) inhabited by colonists – civilizations created by the Ancients. When a Varn lands on a planet, its biome is implanted there: terraforming, the settlement of colonists, animals, and plants. Also, with some Varns (like the Enrothian one), Guardians and various artifacts from the Ancients are deployed with the colonists. It is known that the Varns have something like a crew. Apparently, these are colonists who are more knowledgeable about the history of their Varn. VARNs are located on the mother world ship – the CRON. Inside the Cron, a biome was not necessary, but it began to be formed by the Elemental Lords who returned after some time.
Ironfist arrived on Enroth on Varn 4 (where Might and Magic 1 takes place) through a portal on the edge of the continent.