This is my explanation of the relationship, lifted from a fic I once wrote. Its Dawn asking and Xander answering. Its pretty short.
"How come the First fizzled?"
"Anya and Spike might call you on that"
"You know what I mean."
"At first, it looked like The First Evil was the equivalent of The First
Slayer. An unfrozen caveman devil. But that more points to those Old Ones the
Master was hot for."
"So the First was who?"
"It was like this old-line mob boss compared to the CEO-ish structure of W&H.
It was capable of raising a gang, and targeting some selected innocents. It had
'funds', ya know, the direct power it invested in the initial ubervamp and
then Caleb. It knew where an equally out-of-date law enforcement organization
was located, and hit it hard. Of course, its stealth/psyche-out power to appear
as someone who died played the role of eyes and ears and the equivalent of
mailing a relatives' body parts to its intended targets. It wanted its old turf
back, and it talked big like a boss just out of stir might do. It had the
unwitting help of a small town that gleefully told people there was no Mafia."
"So why'd it go lame-o?"
"Its problems beat its advantages. It couldn't override someone's will, just
misdirect them. If pro buttmunch Andrew and someone with Spike's past were able
to shake it off, then all it could do, aside from the Bringers/Arm-Breakers,
was taunt the weaker Potentials into breaking. Even if the Watchers were out of
touch, their rogue/best agent, Buffy, was not, however long it took her to get
her act together. Through mostly error and some harsh trials, she and we stayed
alive."
"Almost not. When that one Ubervamp and Caleb first showed, they tossed
buildings around. Then one's beheaded, one's Caponed preacher, and at the end,
the Neos were holding back a whole army pf Ubers."
Xander nodded.
"If TFE had, in effect, a 300K budget, it spent 100K apiece of that on the
initial ubervamp--think the ice-cold old man who did Joe Pesci at the end of
'Goodfellas'--and Caleb, aka the modern-day top Made Man. This meant the rest
of its fundage/power had to be divided among the Bringers/Leg-breakers and
lesser ubervamps. Killers one and all, but not the best. Once the Slayers were
awakened, this meant a far more even battle that I think the Neo-Slayers could
have won regardless, despite a higher body count. Enter the mob family that has
long since gone legit, W&H. They don't fear TFE, except for some minor chaos.
They maybe do worry about the few Neos who emerge victorious from the
Hellmouth. All battle-hardened to the max, fully capable of training the
emerging ones from around the world. I guess the Senior Partners guessed that
Buffy would head into the Hellmouth itself, hence the amulet. So they act to
keep the battle short, and once the flow goes with the Slayers, its won."
"So where is it now?"
"TFE may have been a victim of its own best trick. During one of his whines,
Andrew said that it responded as Warren to a Star Wars quote, just like Warren
would have. Using the form of someone who died may have made TFE take on its
personality traits. Certainly its Buffy-taunts were Buffy-like, to hear your
sister tell it. Soooo---what usually happens to Buffy after a big defeat? She
sulks until she is shaken out of it by us. TFE was wearing Buffy's form
constantly when things went down. When Buffy shook off her wound, she said it
looked despondent. The big score had failed, its fortune in power was spent for
now, its gathered followers/gang all fell in the big hole, and it had no
friends to say, 'Hey, c'mon, you've been through worse..' It now sits and sulks
in what was Sunnydale, numb and disbelieving that it could be thwarted. It'll
spend a few million years wondering where Xander and Will are."
"Hold up. If it has this weakness, wouldn't it know to compensate?"
Xander stood in a George Reeves pose, with the setting sun behind him, his
voice deepening.
"Evil Never Learns."
