All but one of her friends died of old age over the course of the thousand years, but Celestia remained young and powerful, the Elements of Harmony keeping her reign a just and noble one. Stone replicas of their symbols were created as a monument to their heroism, and placed in the now-abandoned Castle of the Two Sisters. Princess Celestia, while managing the affairs of her realm from the new castle at Canterlot, founded a school to gather those Ponies with the noblest hearts and brightest minds to prepare for the day when Nightmare Moon would break free and once again ravage the fair land of Equestria.
For without the will of Laughter, who had died too soon, Celestia's armor was incomplete, and the Princess stood no chance against Nightmare Moon.
Days before the fated night, the artificially ageless monarch sent her cleverest, most trustworthy student to a town on the edge of her armor's powers, near a forest that held the Castle. She knew of the town, because the armor was forged there a thousand years before; the Guardian of Harmony named Honesty had smithed the armor and bound the Guardians' wills into it, but was quickly approaching the edge of her own unnatural lifespan. Only in such a location, on the edge of light and dark, and close to the mystically charged ruins where Pony blood was spilled by Pony magic, could the Elements of Harmony once again be reignited.
The battle was swift, but decisive. Without her minions of darkness, Nightmare Moon was unable to prevent the Rainbow of Light from being summoned and breaking her armor. Celestia was freed, and Princess Luna was pardoned for the events that had occurred a millenium before, as it was the dark will bound into her own armor that had turned her heart toward destruction and imbalance.