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The Elves had not revealed to the Númenóreans the existence of the Rings of Power, and so Ar-Pharazôn was unaware of the One Ring's existence and capabilities. However, Sauron's surrender was both "voluntary and cunning", allowing him to gain access to the people of Númenor.
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Understanding that he could not overcome the Númenóreans through martial might, Sauron surrendered to Ar-Pharazôn and was taken back to Númenor as a prisoner. The sheer size and might of the Númenórean army was enough to cause Sauron's forces to flee. In SA 3261, Ar-Pharazôn, the last and most powerful of the Kings of Númenor, landed at Umbar at the head of an even more gigantic army to do battle with Sauron, in contention of Sauron's self-proclaimed title as Overlord of Middle-earth and King of Men. But in SA 1700, as the Elves were nearing defeat, Tar-Minastir of Númenor sent a great armada to Middle-earth and, together with Gil-galad, completely destroyed Sauron's armies, forcing Sauron to return to Mordor to regroup. After the destruction of Eregion, Sauron was able to conquer most of western Middle-earth fairly quickly, driving the Ñoldor under Gil-galad to the Grey Havens and besieging Imladris. Celebrimbor died under torment by Sauron, refusing to reveal what he had done with the Three Rings, which he valued most. He tortured Celebrimbor until he divulged the location of the Seven Rings. He captured Eregion in short order and took back the Nine Rings that were kept there, and also Celebrimbor, the maker of the Elven Rings of Power. Initially, the war went very well for Sauron.
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The conflict, which became known as the War of the Elves and Sauron, began in SA 1693. Correctly assuming that his attempt to gain lordship had been thwarted, Sauron marshalled his armies to seize the Rings of Power by force. However, when he placed the Ring on his finger, the Elves were immediately aware of him. Soon afterwards, Sauron attempted to use it first to subjugate the Elven wielders of the other Rings. If it were damaged or destroyed, so too would be Sauron's strength and power. In this way, Sauron's fate became bound to that of the Ring. As such, he concentrated within the Ring a great part of his own fëa (soul). To accomplish his goal of bringing the peoples of Middle-earth under his dominion, Sauron knew that the One Ring would require an extraordinary amount of power.
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The Ring was forged around the year SA 1600, within Sammath Naur upon Mount Doom.
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Sauron forges the One Ring (by Ted Nasmith)
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