The Bionis and the Mechonis, two great Titans that came into existence many aeon ago. A timeless battle between the two followed until at last only the corpses remained. Eons since, the remains of the Bionis serve as the world for Homs, the people of Bionis as they fight an endless battle against the Mechon forces.
After the introductory scenes, you'll be placed in control of Dunban wielding the legendary Monado. This serves as a battle tutorial for Xenoblade Chronicles and will help you get used to how they unfold. Before you can even begin battle, you'll first need to target an enemy using the [L] or [R] button and once selected, will cause the Battle Palette to display at the bottom of the screen. You'll spot the "Fight" icon in center and selecting it will cause your party to draw their weapons and engage the enemy.
Your characters will begin auto-attacking when you're within range of the enemy so be sure to move Dunban closer. While auto-attacking, you can make use of the Arts on the Battle Palette so long as the icon is lit up. If it's not, it could be due to you being out of range or you haven't met the necessary conditions. For the sake of this battle, you'll have access to Monado Enchant and Monado Buster. Enchant will allow your other party members deal damage to Mechon type enemies while Buster will deal heavy damage to enemies with a bonus applied to the Mechon type. After using an Art, it will go into Cooldown before you can use it again, indicated by the circle refilling.
After you take out the initial set of Mechons, you'll be ambushed by more Mechon M63s, be sure to recast Monado Enchant and finish them off and you'll face off against a Mechon M82, a slightly tougher version of the previous Mechons. The same tactics apply here, cast Monado Enchant on the party and then make use of Monado Buster as soon as it's available. With what looks to be insurmountable odds against another wave of Mechon, Mumkhar will cowardly make his retreat as the prologue comes to an end.