So, a long time ago, I tried to write this multi-chapter Undertale fanfic called "Descentale", which was a story that focused on the Undertale universe after the events of the game. It featured a lot of OCs, and I intended to delve into lore that I came up with for the Undertale universe as far as the history between humans and monsters. Sadly, I never finished the fic, and I don't intend to in its current state. But I do want to discuss my headcanon about human-monster history.
Once, sometime during ancient history, monsters had yet to exist. Also, many humans were capable of using magic around this time. Some magicians were more powerful than others. This often resulted in turf wars. To aid them in battle, magicians used their magic, the dust of the earth, and a bit of their own life force to create non-human soldiers, ones that varied in appearance according to their purpose. These were the first monsters. Monsters were fairly easy to create, though the most powerful ones took a lot more energy to make. Boss monsters were the strongest of all, often used as generals to command magician armies, or as guardians that protected locations and valuable treasures.
Unfortunately, most monsters were treated as lesser than humans, simply due to the fact they were so easily destroyed by human violence. They weren't even recognized as people, but as disposable tools without real thoughts or feelings. However, the longer monsters were allowed to live, the more humanity began to realize their initial perception of their creations was way off... not only were monsters far more emotional than humans, they tended to be more empathetic, peace-loving, and kind. Their souls and physical forms were weaker, but had more love in them than any human could hope to have.
It was this discovery that led human magicians to voluntarily ban the practice of monster creation, and to let their armies go free and form their own civilization. Monsters created their own kingdom, with Boss monsters naturally falling into the leaderly role. Eventually, monsters became just as prominent as humans were. For the longest time, there was peace between the two races... until rumors about monsters stealing human souls began circulating. You can fill in the rest.