Xi'an was under the domain of System Lord Vu. It housed the Goa'uld's palace and treasury room that contained Vu's research into the stargate's ninth chevron, the Destiny, as well as contained Vu's collection of Ancient technology.
At some point, Xi'an had become liberated from System Lord Vu's reign and retained Vu's research. This made them a target of the Lucian Alliance. Vu's research however, also became an interest to Stargate Command, who tried to aid the natives in defending Xi'an but failed, due to the Xi'an military already siding with the Alliance and making it a trap for the Tau'ri.