Actually FH is explained if you do a mini side quest. FH branched from Esthar because a dispute (which I forget the details of). That of course doesn't explain where Esthar got it's technology.
I'm sticking with alien for now, I just can't see a reason, or a means for Lunatic to have been built on the planet, unless a sorceress made it.
Hey come to think of it, what if Hyne was alien. It would make sense, and be a lot like FFVII (SPOILER) the Cetra .
Good point about Cid's lack of knowledge. I'm sure a replay through the game would explain that somewhere in the script, I have a vague recollection. It does raise a few interesting questions though...