A long time ago in a galaxy far far away, there were the Bunnycats. The Bunnycats were very advanced, so much so that they could start looking toward the future rather than concentrating on the now. sadly, the future was full of the dark, cold emptiness of a post-entropic decay universe, and the Bunnycats were understandably not super into that. So, the Bunnycats set about to fix that, and after (presumably) trying many things, they found the best method they could. See, there's this thing called magic, and it generates energy ex nihilo, and thus can be used to slow/halt the advance of entropy. Unfortunately, magic runs off of emotions, and the Bunnycats didn't have those, with the exceptions of a few raving lunatics.
So, the Bunnycats set out to find other species with emotions to magic for them. This is where earth comes in. A Bunnycat lands on earth, and finds all theme kinda clever emotional monkeys living in caves. So the Bunnycat goes up to the cave-monkey and goes "hi there! you want some magic?", and the monkey goes "ugh", which means "sure" in cave-monkey. and the Bunnycat is like "okay, make a wish." and the cave-monkey is like "ugh ugh-ugh, ugh!" and wishes to be more smarterer. and then the cave-monkey became a magical cave-monkey that was more smarterer than it was before, and this is also the sequence of events that leads to mankind leaving caves, yay!
anyway, time passes, and the Bunnycat on earth (his name's Kyubey) goes around and contracts lotsa people, and he takes notes and makes statistics and stuff and goes "hmm, teenage girls seem to be the most emotional, so I'll just focus my efforts on contracting them, get more bang for my buck."
and that's what he does.
and more time passes, and Kyubey keeps contacting magical girls, who make wishes and generate energy to save the universe. He kinda nudges cultural development a bit, the magical girl genre makes potentials more likely to contract and more contracts is good, etc.
and some more time passes and we hit "present day". but before I get to that I should explain magical girls more.
See, a magical girl is basically a lich, she gets her soul removed from her squishy body and put in a nice durable gem, which is a much smaller target for damage and means she won't die unless her gem get's smashed. the downside is that operating her body uses magic, and when a magical girl uses magic, they generate Grief as a byproduct, which builds up in her soul gem. As a side note, it's not actually grief-grief, but kinda a catch-all term for nasty-bad gunky emotions and stuff. the magical girl being sad can also make grief build up.
Now, if a magical girl's soul gem fills all the way, her soul will explode and she turns into a giant angst monster called a Witch. Not to be confused with the type that ride on brooms.
witches are so sad and stuff that they actually warp reality to form their own little pocket dimension of mopeyness. they're so upset that even hiding in a pocket dimension they radiate all kinds of bad juju all over the place, which makes bystanders get all depressed and suicide, or kill people, or get in traffic accidents, etc.
On the plus side, magical girls can hunt down these angst monsters and wail on them until they die and just sorta implode, forming a grief seed, which sucks up grief, which they can use to get rid of the gunk in their soul gems.
incidentally, the "you are shiny rock" and "no, you are the giant monsters" tidbits tend to turn potential contractees off the opportunity, so Kyubey just kinda stopped mentioning it in his pitch after a while. He still tells them at some point, assuming they don't find out themselves, because he needs their sweet, sweet magical energy, and there are two points in the magical girl life-cycle that generate bucketfuls, rather than the dripping faucet that is the rest of the time.
The first point is when they make a wish and become a magica girl. the second is when they explode into a giant angst monster, so he kinda needs them to witch out at some point.
Many magical girls are rather upset when they learn this, but he's not actually sure why, because he is Bunnycat and cannot grok emotions.
they're like "why are you make me suffering?!!" and he's like "why are you so peeved? I mean, sure, I guess it sucks for some of you, but you're saving the universe! needs of the many and all that. I really don't get why this is such a sticking point for you, humans are so illogical- Oh, you witched out. Nevermind, I'll go talk to someone else.", and the witch is like "warum ist mein Leid ?!", because witches speak German for some reason.