Prague was the center of the powerful Holy Roman Empire before its sacking by Gladstone's armies in 1868. Afterwards, the city and people remained, but only as weak shadows of their former glory.
It is unknown exactly when the city was established; however, by the mid-fourteenth century, Prague had become a powerful center of the Holy Roman Empire. It was during this time that the city's famous Stone Bridge (over the Vltava River) was constructed. Several djinn had a hand in its construction, among them the djinni Bartimaeus.
This would not be the only Prague-centric job that Bartimaeus would have to complete. About two centuries later, Bartimaeus would be charged to build and strengthen the walls of Prague as its structure and population expanded. The Empire was at the peak of its power during this time, and many powerful magicians from around the world would flock to the city. Innovations such as Loew's creation of the golem would occur during this time period.
The Empire endured for nearly five hundred centuries with Prague at its center, but eventually its power came to decline. Eventually, in the late nineteenth century, a powerful magician hailing from Britain, William Ewart Gladstone, harnessed the power of several spirits to create a Staff of power. With this Staff, he began conquering the Empire's lands. Bartimaeus was present during the final sacking of Prague. He witnessed the destruction of the city's walls (which he had so proudly built) as well as the death of its people and the emperor. The Empire was destroyed, to be replaced by Gladstone's British Empire.
A new magical capital was established: London.
About two hundred years later, Prague would have rebuilt, though its magical power and glory is but a memory of the past.