The Human Betrayal was a time and event that happened a long time ago, in Elvin history. It dated back when the elves and humans used to live together in peace and harmony until the humans decided on a plan to overthrow the elves. They have planned it carefully for quite a while until some telepaths caught some thoughts and found out about the planned betrayal. This resulted in the sinking of Atlantis, hiding from humans and becoming a myth to those without the knowledge of their existence. This is why telepathy has become such a valued ability.
It's later found out that the Human's betrayal started because the humans found out about Vespera's Nightfall and her torturous methods. Because of this, human's lost trust in elves. The Councillors try to cover up this point in history afraid it might shatter their world. They don't teach this aspect of the story in their school.