In a way, they just... are.

I don't recall any bit of lore, at least until the Craglorn quests, that ever suggested where the constellations themsleves came from, and even with Craglorn there are enough gaps IMO that it doesn't fully explain what they are and came from either. At best the only thing it can confirm is how some people co-opted them for *reasons.* (considering only the people of Craglorn seemed to notice the constellations going missing, strongly suspect it was a case of co-opting.)

The common theory for their power, however, is that the stars are holes in Oblivion to the realm of Aetherius, created by the Magna-Ge when they fled Nirn. Though the Yokudans say the stars were placed there by Ruptga, or Tall Papa, to guide the spirits to the Far Shores. (I do have a theory on how they could be both technically true though.) Whatever the case, their origins give them power, and the ones that make up the constellations are connected in some way that amplifies that.

In terms of Tamriel Astrology, you have Three Guardian signs, Nine Charges, and the Serpent. The Warrior is the guardian of the Steed, Lady and Lord. The Thief is the guardian of the Lover, Tower and Shadow. The Mage is the guardian of the Apprentice, Atronach (sometimes also called the Golem) and Ritual. Each of the guardians and charges are assigned a month, and being born that month usually meant you were born under that sign. The Serpent, however, moves through the skies in a way the other stars don't, and sometimes "threatens" the charges. One is born under the sign of the Serpent if they were born when the Serpent was threatening the sign of that month.

...and the importance of what sign you were born under wasn't just for your horoscope. Until Skyrim and ESO, what sign your character was born under translated into attributes, and sometimes supernatural abilities, like being able to open almost any lock once per day (Tower) or being able to absorb Magicka from spells and having a larger natural pool, but unable to recover your magicka naturally (Atronach). One of the reasons Shadowscales are so sneaky, after all, is that many born under the Shadow sign often possess the limited power to turn themselves invisible (or at least the PC of Morrowind and Oblivion, if that was your sign)

The UESP lore page for Astronomy is a good starting point if you want to know more.

Thank you @Foefaller I have researched a bit using UESP in this search as well but as yet have not come across how the Constellation's came to be other than that they were the remnants of the twelve worlds before the creation of Nirn so was hoping ones here would know more of this.

What I have found so far is that the Nedes were obsessed with the constellations; a book on how the Yokudans chased the stars; and writings of an ancient Yokudan legend of a warrior hero of the Dawn Era who travelled through the zodiac. So it seems somehow that the Yokudans would know more of these Constellations and how they came to be:)

I have also come across ones saying the Constellations are not connected to the Magna-Ge or part of the Magna-Ge so was wondering if you would mind sharing what your theory was.

edit: maybe scrying in Craglorn will reveal more:)

Something else of this...

The constellations are talked about by Lawrence Schick in this video at about 37:10 into it. The question asked referred to them as Foreign Gods, and Lawrence Schick described them or the concept of them as a type of Memory Device.

How Arana of the Reach perceives constellations - sky tales etched in metal that are Guardians of the Reach

Mage Constellation - As a Witch
"The Witch shines her light on covens that protect the Reach from outsiders and others who mean to do Reachfolk harm. Her good eye sees through everything - rock, water, and flesh - to find the hard truths. And when she speaks, she never lies."

Warrior Constellation: As a Headsman
"He carries an axe, doesn't he? The Headsman stands for swift ends and payment in kind. He delivers justice and punishment in equal measure."

Thief Constellation: As a Hunter
"The Hunter is the wiliest of the sky tales. Clever as an old fox and swift as a young one. She watches the Snake in the Stars, finding it no matter where it slithers. She teaches us to keep our feet quiet and our kills as silent as the night."

Serpent Constellation: As a Corrupter
"The Snake in the Stars is the Corrupter, the Enemy. If permitted, it would consume the Lesser Stars without hesitation. Luckily, the Guardians - the Headsman, the Witch, and the Hunter - stand strong and defend the Lesser Stars."


So from these quotes - Arana's words, a wonder why she sees the Mage, the Witch, as having only one good eye.

Edit: Could Arana be referring to a Third Eye when she mentions this one good eye - Azurah's third eye?