There wasn't a proper significant event for the changing of Era 1 to 2, it's a little like the start of civilized population, as it were. From what I remember of Era 1, it was a time of chaos, with griefers and their kind running free. There was a point where that flow of people stopped, and a couple of proper towns had started. The two were the unnamed village, and Sand Villa.
The list of people who remain active on the server from that time are:
mopb3, toiongo, magpieman, thelineguy, loloplane, memrme.
Ones who still hold some sort of prominence over the community or can be summoned at will are:
spunkiethefirst, gallazius, stalkercat
These people and a few others who have completely left our memories were the ones to create civilization and probably declare the second era, when the server gained the aspect of order.
We can't really decide when the second era started precisely, because the wiki was started only in the late 2nd era, and nobody really thought about it before that..
(Those who I have mentioned, correct me if I'm wrong, my memories may not be 100% accurate. But from what I remember, there was no big event like a world reset at the time. Perhaps the founding of the guardians?)