The princess was at first dismayed that he had sacrificed immortality for her, but eventually she came to love the man for his utter devotion. She convinced him to leave the forest and live as humans. After much discussion, he agreed. Many of the wolves were so loyal to him that they too were made human (how?), and swore to serve as his royal guard.
They settle down, make a village, and under the rule and guidance of the wolf lord and the princess, the village grows quickly. The wolf lord's temper is fierce, but the princess can calm his by a mere touch or a quiet word. The village grew quickly, and it wasn't not long before trade caravans and settlers arrived. But with the caravans came brigands, and it became necessary to expand the army. Before long, the village had turned into a city and the guard into an army.
The arrogant king got word that his lost daughter was seen in the new city, and he arrived to take her home. The meeting between king, wolf lord and princess was tense, but eventually the king accepted that she was not held there against her will. He parted in peace, but the princess' brother - the prince - hated the wolf lord. The prince assassinated the king and took over the throne. He spread lies about the wolf lord, telling people that he was an evil abomination who had kidnapped and violated the princess.
He gathered his own army to "free" the princess and waged war on the wolf lord's small kingdom.