It had nothing to do with Sheogorath.
The meteor continued its descent into Vivec City because after the deaths of Amalexia and Sotha Sil, Vivec fled Morrowind. With nothing to keep it aloft, two crafty mages created the Ingenium (which ran off of Souls) to keep the Ministry of Truth safely in the sky.
When the Ingenium was fed the Soul of one of the Mages wives, the Mage destroyed the Ingenium in an attempt to save her. With nothing keeping it aloft anymore, the Ministry resumed full speed and slammed into Vivec City turning it into a crater, causing Red Mountain to erupt, and boiling the Bay.
Sheogorath had nothing to do with Red Year.
It is written that when he rebelled against the Tribunal, Sheogorath tricked the moon Baar Dau, inspiring it to hurl itself at the city of Vivec. Sheogorath justified his actions by claiming Vivec was built in mockery of the heavens. Vivec is then said to have frozen Baar Dau in its descent with one gesture; the moon then swore itself to the Tribunal's service forever. After the Nerevarine destroyed the heart of Lorkhan, Vivec's power was greatly weakened, and Baar Dau continued its descent, destroying Vivec City and resulting in the Red Year.
In game books are all wrong? Or do you have a post that states otherwise? Lol.