The World Transformation is an event that was an apparent part of the God Hand's design once Griffith was restored to physical form so that the events leading to it would result in a global Interstice of the physical and astral planes.
After the Incarnation Ceremony, a reconstituted Griffith led his Neo Band of the Hawk and the armies of the Holy See Religious Order against the rogue Ganishka and the Kushan Empire. In a gambit to fight Griffith at a level of power equal to his God Hand status, Ganishka ends up becoming a semi mindless monster as Griffith rides Nosferatu Zodd to reach the apostle's human face. At that moment, the Skull Knight attempts to strike Griffith down when he assumes his Femto form with the Sword of Actuation
But Griffith expected his would-be assassin would show up at this point and time and allowed him to act for his own purpose. When the Skull Knight made his move with an attempted attack from behind as he was standing over Ganishka's human face, Griffith uses his powers to manipulate the dimensional tear so that it would inflict Ganishka's human face instead. As Ganshika had descended into deepest parts of the Astral Plane twice, the attack caused a chain reaction that opens a fissure into the Astral Plane that instantly killed the tyrant while a bright and warm light exploded from his husk.
The light, felt by spiritually aware people, engulfed the entire world within minutes. This caused the astral plane, a realm normally concealed from humanity, to overlap with the material world. This causes all mythical creatures and fallen entities, including the rest of the God Hand, to fully manifest in the physical world once it became a global Interstice via the World Tree that sprouted from Ganishka's remains. The event also fully revived the Sea God from within its earthen prison. With various supernatural creatures wrecking havoc in the main land, the humans who survived and escaped found sanctuary in Griffith's kingdom of Falconia.