If we are currently using a calendar divided into years, months days and so forth; how did they establish what year it was prior? Surely they didn't have a 753 bce or such. So how did they set years/divide years up?
Many traditional calendars are still in use today besides the Gregorian calendar.
To mark the passage of years, there are a number of observable phenomena, from nature (general seasonal progression, return of the Nile flood, monsoon periods) to astronomy (appearance of certain stars or constellations that are only visible during certain times of the year).
The term "month" literally is derived from the word "moon", as a month originally was one full lunar cycle. The reason why e.g. Jewish or Islamic holidays "wander" through the Gregorian year is because the lunar aspect of their calendars is much more important than in the Gregorian year.
As for how to refer to specific years, a common set up is to refer to the monarch's ruling year (referred to as the regnal year of King/Queen X, or the era name within specifically an East Asian context; Japan to this day officially uses an era name referring to the current emperor to denote the year). Roman authors often refer to the year when X and Y were consul.
Some non-Gregorian calendars also do have a specific Year 0 (or 1) , such as the Islamic calendar being based on the first Hijra.