I've figured that they're a separate race halfway between Hyur and Elezen.
Also I don't really want to see another race turn out to be an Allagan experiment.
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Xande definetly wasn't sane. The Summoner job was invented because he told his mages/scientists that if they didn't come up with some way to combat primals (and keep them from coming back), he'd start killing one of them a day. Such pressure led to them inventing the magic behind the Summoner job as well as technology like neurolinks. So at least some of the mages/scientists were probably more concerned with "were the results they were getting keeping Xande happy" rather then "was this ethical".
Gilgamesh, like Omega are 2 beings that transcend game canon and appear in almost every FF game and maintain their original continuity. Gilgamesh was originally from the world of FFV, fell into a rift, and then appears from the rift in FF8,9,11,12,13,14, and then retroactively as a special boss in FF1,4 and probably a few others I'm forgetting.
It makes me wonder what would've happened had Amon not tried cloning their first emperor.
If I recall correctly the empire was in strife due to not having a strong leader. To the point where it sounded like they were on the brink of collapse.
Don't forget they were fairly advanced before finding omega which was like giving their scientist a few cups of espresso.
Omega was found long before Amon though. In fact, we don't know when it was originally found. Just that it was fairly early in the 3rd Astral Era and that the Allagans were already far more advanced then the current tech level in Eorzea is before they found it. Omega wasn't woken up until Xande's Clone ran into the primals in Meracydia.
What ended up happening to Allagan society that with all the automation, it turned into a hyper-consumer culture. There wasn't a lot of innovation going on anymore and Amon saw the society had become stagnant. He wanted to put an end to that, so he resurrected the Allagan leader who had caused the most advancement to Allagan society previously.
Ruthless does not necessarily equate to insane. Threat of execution is a very strong motivator, and as we can see, it got results. I don't consider the origin-of-summoning story to be a strong indicator of his insanity. Plenty of rulers are willing to "do what must be done" in order to safeguard their protectorate. Whether those things ACTUALLY "needed to be done" can be debated at length, but even at worst, they point to poor judgment, not insanity.
Placing less value on the individual lives of his subjects compared to the well-being of his kingdom as a whole is not nice, but it's not an unexpected trait to find in a successful ruler. Blatantly self-destructive stuff like his pact with the Cloud of Darkness are where it becomes clear that he wasn't firing on all cylinders!