I think there was a research facility in G2 in the awakened magic facilities that used micro scopes to look at what they called and i quote as best i can "scrolls that contain life" or something of that nature. They definitely knew what genes were, and the makers of the geneforge had to know this, as by my thinking they were changing those genes with magic, rather like splicing human insulin in bacteria to day. Of course humans aren't bacteria and shaping isn't insulin, but the idea remains similar. What I'm trying to say is that whomever it was that made the geneforge / invented the canisters had knowledge of genes, and how they worked. The only reason i think that they were altering them is the FORGE thing, and that when one uses canisters for the first time the text that appears is something along "I'm being altered!" The game might as well be called Genealter in my opinion, but that name, well, sucks.