Interesting Timeline though I'm a bit confused by
Does this mean that other galaxies such as Andromeda, the Large Magellanic Cloud, and Centaurus A are part of the Milky Way galaxy rather than being separate galaxies?
This is a reference to the configuration of the universe in the original Elite. It was split into eight "galaxies", each consisting of 256 systems (actually each just a star, a planet and a space station). In Frontier, the playable universe was melded into a single large galaxy, with worlds such as Lave from the original game included to give some continuity. It's a bit of a retcon, but we we go with it.
The only "history" which should be considered canon is contained within the original 1984 manual and Holdstock's "The Dark Wheel" novella. In my humble opinion, everything that happened since (read Frontier and Frontier: First Encounters) should be retconned, burned, forgotten.
Elite: Dangerous is a re-imagining of the original game and should not depend on the backstory of the two infamous PC instalments. Better to forget they ever existed.
Infamous? Frontier was critically acclaimed. First Encounters was infamous, but only because it was released with bugs. Anyway, a total reboot would not be a good idea as it would alienate a lot of players, including me. It's also not what appears to have happened, since the human-centric universe, the Federation, Empire and Alliance factions and about half the playable ship roster are all elements continued from Frontier and First Encounters. There's sure to be some necessary retconning, but certainly FE and FFE have not been and should not be forgotten.
No, it refers to the original Elite where there were "8 galaxies" to explore. The history document "canonises" these galaxies for the Frontier universe (our universe), by claiming that they weren't actually separate galaxies but simple different parts of our galaxy.
Ah, ninja'ed... :/
Could be worse. I got double ninja'd!