So I have my own little story for how Luna was transformed, I had an entire comic planned for it that I realized I'll probably never get around to.
During Discord's rule, he unleashed many frightening creatures and spirits across Equestria. None was more feared than the Dread. They were swirling masses of evil who knew everything going inside your head. Your thoughts. Your desires. Your fears. Everything. Although incidents were rare, the effects of what they did was known everywhere. It coaxed a pony, made them feel safe, fed off of their strongest emotions of hate, jealousy and sadness. The Dread would convince you that all their wishes would come true with it's help. After a pony agrees, the Dread would engulf them, taking over everything and making the pony a shadow of its former self. A shadow of pure evil that turned on everyone it once loved.
Of course, when Celestia and Luna overthrew Discord, they made sure every one of these was obliterated. Or so they thought. One managed to remain, and it waited. And waited, And waited, until everypony had forgotten about them.
During the peak of Luna and Celestia's rule, and where the story of Luna's Banishment starts, the only remaining dread chose to strike. Its prey wasn't hard. It found the Moon Princess alone, seething, near the Everfree Forest. She had run off after an argument with her sister, it could instantly tell. It could feel the envy and anger pulsing through her mind. Perfect.
Luna knew what it was, she knew it was dangerous and she knew how to destroy it. Yet, its promises...
"I thought we had destroyed you all"
"Well as you can see, you didn't"
"Doesn't matter, you will be extinct in a couple of seconds anyway"
"Are you sure you can? You don't need to run to your sister begging for help?"
"SHUT UP! I DO NOT NEED MY SISTER FOR EVERYTHING"
Well, the rest of the world needs her though, doesn't it? 'Our sweet Celestia, how we love her day and frolick under her rule'. They obviously don't need you and your night do they?"
...The princess said nothing but just stared at the ground, tears forming in her eyes, any moment...
"Wouldn't it be nice to be appreciated, to show the world how fabulous the night it, to upstage your sister for once? I certainly prefer the night.... Oooh, I have an idea, but I need your help"
...The alicorn's ears pricked up...
"Let's say that I helped you, helped you in a way to get the night noticed, to get you noticed. A way to make you loved"
"What was that, Princess?"
"I...just...........yes. Help me"
The Dread swallowed the Princess in its swirling mist, forcing her true personality deep into the back of her mind, which the Dread now had complete control of. Only Luna's dark emotions shone through. And so, the princess of the night became the Nightmare Moon we know of today.
Nightmare Moon returned to Canterlot and wreaked havoc. When she reached Celestia, however, the look on the sun princesses face was one of sadness, and not of anger. She refused to fight when challenged. She understood what had happened and knew that a Dread bound to an extremely powerful pony like an alicorn could not be vanquished immediately. Reluctantly, she banished the monster that her sister now was to the moon, hoping the the time spent there would weaken the Dread's grip on her dear sister.
The rest of the story we already know.
So that is an attempt at some sort of writing -__- I KNOW IT'S BAD AND THERE ARE GRAMMAR MISTAKES IN IT...I sleep now.