While I think mages are a little more likely to appear on the empire's side, I don't really think it's out of the question being on either side of the war. I think membership in either faction could be worked into a backstory effectively. A few questions I ask myself when trying to come up with a story myself include ideas such as:
-- What are the basics such as age, appearance? - This can give a good starting point on where the character is in his life. Younger characters to me are usually a bit more brash and idealistic where as my older characters are a bit wiser and less impulsive both of which coming from the experience of one's years.
-- What does he like to do either career-wise or just general interests and skills? - This is a great one to begin digging into his past. If he likes smithing for instance, where and from whom did he learn it? In your case, he's skilled at magic, where did he get that knowledge, how did he perfect it? Was he the first in his family to get into magic or has there been a line of skilled mages in his family for years?
-- What was his family background? What did his parents do? Where did he grow up? Any siblings? - For Raido, my main character, this one is pretty much the basis of his story. He had to deal with seeing his parents both get killed and later, his brother too. This is the biggest influence both good and bad that identifies who he is. The guilt he felt for not being able to stop either event from happening and the anger that came as a result of it is something he's had to battle with his whole life. The family background in my case also ties in his skills and strengths. He got the warrior, way of the sword mentality from his father who was a respected warrior and privateer back in Hammerfell. Raido got his magic proficiency from his mother who was a skilled mystic whom considerably later in his life he finds out she was actually a Psijic.
I'll add some more in a second post shortly.