How did Jareth become the Goblin King?

Question

In the film Labyrinth Jareth, the Goblin King has the form of a healthy, handsome middle aged human male, played flawlessly by David Bowie. The rest of the Goblins are all essentially creaturelings of various make, made by Jim Henson's puppet shop. This could mean two things:

1. Jareth is an "evolved" form of Goblin, that is either similar to or can mimic human form. [This is possible, considering he showed shape-shifting powers in the film by turning himself into an owl. Or...
2. Jareth was once human and mortal, but "became" the Goblin King somehow. This could also be possible, as it explains why he would want a human baby; he would need a new heir to take his place.

Was any clear explanation given in-canon?

Note: I know there was a "Sequel manga" of such, but never read it, so perhaps that could spread some understanding as well.

Answer 1

According to Jim Henson's Labyrinth: Coronation (major spoilers ahead if you haven't read it):

Jareth was a human child born in 18th century Venice whose father, Alfred Tyton, was an elite and mother, Maria (the brave-heart protagonist of the story) was a maid. Jareth's father had struck a deal with the Goblin King to take the throne when it was time. But when the time came, he gave up his son to them instead of himself. Maria, who had a fight shortly before walking out with baby Jareth, was attacked by the Goblins who snatched her son away. Maria, when she realized who was behind the abduction, begged the Goblin King to give him back.

The King too, like Jareth, gave her 13 hours time to go through the Labyrinth to rescue her son. After a bizarre time of facing many many difficulties, Maria managed to get her son, but also figured that this Goblin King was evil (unlike Jareth) and didn't want a replacement for himself, but a new body which he could possess and live on. Maria and gang stop him from doing so, and he expires, but the clock strikes 13, meaning Maria has been defeated. The goblins show her that the future that awaits her and her child is miserable, and apparently she won't be able to keep him anyway, because his grandfather will take him away. Maria, knowing this, still proceeds to leave with the baby.

This is all told by Jareth, now the king of Labyrinth as a form of story. Our secondary narrator of the story, Beetleglum, a goblin, adds that there was some sort of accident, when Maria tried to leave, meaning either she was trapped with Jareth in the Labyrinth, or maybe a part of her and the baby managed to leave, while a figment of them stayed back. Either way, Jareth was the child, or at least the part of the child, who was raised by Beetleglum, and Jareth says the child thanks him for that.

Answer 2

Jareth is, according to the film's official novelisation, not a goblin. He merely rules them.

He needed something to keep him amused here. The goblins were, frankly, a bore. They were so stupid they couldn’t find their own way through the Labyrinth. They were without wisdom or wit. In the old days, when many babies had been offered to him, Jareth had been more tolerant, reckoning that soon he would certainly find one who could be trained as a worthy companion to the throne, one whose young blood would serve to refresh Jareth’s, whose high spirits would dispel the thoughts of aging that oppressed the King of the Goblins.

That being said, the goblins are themselves (potentially) children who were abducted in earlier years, so it's more than possible that Jareth was an abducted child who was mentored for the job by the previous king.

It pleased him to think of his Labyrinth as a board game; if you got too close to the winning square, you might find a snake taking you back to the start. No one had, and very few had gotten as far as this disturbing girl, who was too old to be turned into a goblin. Jareth examined her face in his crystal. Too old to be a goblin, but too young to be kept by him, damn her innocent eyes.