In "6995 KHz," we learned that the Doomsday Device was created by the First People. But who were they?
I believe the First People were some ancient, antediluvian civilization like Atlantis. They evolved like modern human beings and developed highly advanced technology. Eventually, they gained the ability to manipulate the very fabric of spacetime (i.e., the "Vacuum").
Unfortunately, one of the First People's spacetime experiments went horribly wrong. The resulting catastrophe erased their fossil record and split the timeline in two. The Doomsday Device is both the source of this catastrophe as well as a possible solution to the split.
The Observers are not the First People. Rather, the former are a race of inter-dimensional beings who, true to their name, have been observing this split in the timeline. The problem is that the Observers have inadvertently became participants, as we saw in "Peter."