Thracia 776 is set between Chapter 5 to Chapter 8 of the second generation storyline, while the exiled prince Seliph is still in hiding and preparing to battle Arvis's hold on the continent. During Genealogy of the Holy War, in the year Gran 761, the ruler of Grannvale, Arvis has expanded his country's rule across the whole of Jugdral. Thracia 776 takes place during the events of Fire Emblem: Genealogy of the Holy War. The world map of Thracia 776 featuring the southeast portion of the continent. After his departure from Intelligent Systems, she followed him she went on to become the illustrator of TearRing Saga: Utna Heroes Saga and character designer of Vestaria Saga I.
Mayumi Hirota was first brought to the Fire Emblem series to work on the Fire Emblem Treasure artbook for the previous title, and she was made the illustrator for Thracia 776.
Before the game's release in 2000, Kaga left Intelligent Systems to found his own company, Tirnanog. According to developer Shouzou Kaga, Thracia 776 was created to satisfy the demands of older Fire Emblem fans who had issues with the gameplay in Genealogy of the Holy War.