Duel on Banaro Island

The Banaro Incident was the event that initiated the war that would forever change the Age of Pirates.

History
This event's origin can go way back to the time when Marshall D. Teach, better known as Blackbeard, was under the service of Whitebeard in attempt to search for the Devil Fruit he desires. One day, the 4th division commander Thatch found the fruit. For Blackbeard to claim it, he killed Thatch. Blackbeard took the fruit and fled. Due to Blackbeard being formerly under the command of the captain of the 2nd division of Whitebeard's fleet, Portgas D. Ace elected to go after him and kill him.

Banaro Invasion
Blackbeard and his crew invade a small island called Banaro Island. They knocked out and killed most of the citizens residing there, after which they plundered the island. Most citizens ran away from the town to escape from the pirates. Blackbeard had heard that Luffy had a newly acquired bounty of 300,000,000. He and his crew were preparing to leave when they were stopped by Ace who was sitting on a building, telling him to wait for a minute. After some of Blackbeard's crew tried to fight him, Ace and Blackbeard faced off against each other. After that Blackbeard defeated Ace and then presumably went to deliver Ace to the government, which resulted in the granting of the Shichibukai title to Blackbeard.

The Heat is Up
As Ace sat on the building, Blackbeard greeted him as his former commander, to which Ace rebuked because of the former's actions. Despite this, Blackbeard asked if Ace would join his crew, which Ace refused. After that, Van Augur shot at Ace with his gun. Next, Jesus Burgess lifted a hotel building and attempted to smash Ace with it, only for him to use his Mera Mera no Mi ability to burn the building before it hit him. Blackbeard angrily told his crew to stand down as a fireball suddenly struck him. When Blackbeard stood up, he ordered his crew to leave the town while he took care of Ace. Blackbeard knew why Ace wanted to kill him and made no excuse of it. Blackbeard explained why he killed Thatch and unleashed a dark shroud exclaiming "Ace, you are fire... I am darkness!!"

The Duel
Blackbeard proceeded to use his Yami Yami no Mi powers to swallow the town, intentionally missing Ace, then expelling it later with the dark aura around him swirling and violently releasing the remains of the town as a demonstration of his power. However, Ace is apparently unimpressed, and uses his Hotarubi: Hirudama (Firefly Fire: Body in Flames) technique with his Mera Mera no Mi powers, and was mildly surprised that the attack couldn't just pass through him as he is a Logia Devil Fruit user. After the initial shock of the attack, Blackbeard consumed the flames with his dark aura, stood up and explained that his power makes him absorb everything, including knives, punches, flames etc. In fact, he perhaps takes even more damage than a normal human. But in exchange for that, he used his Kurozu (Dark Vortex) technique to grab Ace's body and activate the Yami Yami no Mi's most devastating feature: the power to nullify any Devil Fruit's powers upon touch. After Ace realized he couldn't use his Logia fruit powers, Blackbeard delivered a powerful punch to his stomach, smashing him onto the remains of the town. Blood came spilling out of Ace's mouth, realizing he felt pain for the first time in a long while.

Blackbeard gloats that after exposing the "weakness" of all the so-called overconfident Devil Fruit users, he cannot be defeated, because his ability is truly the power of the "Devil." However, Ace pointed out that it only works if Blackbeard touches him, to which Blackbeard counters by saying he has already proved that Ace cannot escape him, and used his Kurozu technique to attempt to draw him in and grab him again, but Ace fought otherwise, and countered by throwing his Shinka: Shiranui (Sacred Fire: Mysterious Light at Sea) technique in the form of two fire lances into Blackbeard's chest, forcing him to punch Ace on his neck. Ace was again thrown into the town's remains as Blackbeard attempted to consume the flames with his powers. Ace realized that if he took a hit like that again, Blackbeard would break his neck, and immediately retaliated from a distance with his Juujika (Cross-Fire) technique, as Blackbeard after successfully consuming the flames from the previous attack, took it head on.

As the battle rageson, the Banaro Rocks collapsed due to the amount of power both combatants are using. Both Ace and Blackbeard were exhausted, but it seems that Ace was truly worn out. Blackbeard gives him one last chance to join his crew, but stubborn and determined to the end, Ace refuses. Blackbeard, impressed by his strength, expresses his mild disappointment and said the world could have been theirs for the taking, before unleashing a massive dark shroud. Ace at the same time unleashed his own ultimate technique: Dai Enkai: Entei (Flame Commandment: Flame Emperor). Both prepared to fight to the death, "The Sun" and "The Night" literally clashed, forming a massive explosion of energy that almost consumed all of Banaro Island.

Aftermath
Apparently, the Banaro Incident was the trigger of the great event yet to come on the Grand Line. Later on, it is revealed that Blackbeard emerged as the victor when Bartholomew Kuma confirmed to Gecko Moria that Blackbeard is the newest member of the Shichibukai. Ace is revealed to have been taken to Impel Down in a newspaper article Absalom read. The piece of paper Luffy was given by Ace was revealed to be a Vivre Card by Lola, and it starts burning, meaning the owner's life is in danger. In the Sabaody Archipelago, the public execution of Portgas D. Ace was announced to commence in the location within ten days. As predicted, Whitebeard, who was Ace's captain, would not take this news lying down and the World Government seems to be fully aware of that. The "great event" on the Grand Line is thus apparently the imminent war between the World Government and the Whitebeard Pirates, with the Shichibukai and many of the Marines as the World Government's infantry. Within the three days of the news being revealed to the public, the Marine forces have been mobilizing themselves, and several high-ranked Marines have arrived at Mariejois. Meanwhile, Monkey D. Luffy was sent to Amazon Lily by Bartholomew Kuma and despite the initial hostile reaction to his presence by the Kuja tribe, especially by their empress, Boa Hancock, who is a Shichibukai herself, he was able to befriend her by showing his selfless actions, such as protecting her and her sisters' secret. Once he found out about Ace being due for execution and with his Vivre Card burned to a tenth of its size, he requested her to accept the Shichibukai call (which Hancock initially refused) to help him rescue Ace by going to Impel Down. Hancock (who had now fallen in love with Luffy) agreed, and the following day she left Amazon Lily sneaking in Luffy as she entered Momonga's Marine ship, requesting permission to travel to Impel Down. Whitebeard had made his first move by annihilating the 23 ships surrounding his ship, the Moby Dick, before moving. In response to this, Fleet Admiral Sengoku has ordered Impel Down on high alert, since they cannot predict Whitebeard's movements and how quickly he will strike. The Shichibukai themselves, Blackbeard included, with the exception of Jinbei (who does not wish to fight against Whitebeard) and Boa Hancock (due to her traveling to Impel Down) are in a meeting to discuss these events. Vice Admiral Garp has traveled to Impel Down to talk to Ace, who is in a bad state. Ace has apparently requested that he kills him, presumably to stop Whitebeard from moving. Garp replies that it won't help anything, as Whitebeard has already been angered.

Trivia

 * This incident is the first time two people with the initial D. are shown fighting against each other.