As told by the Baron Sherlane Halaran, to the assembled adventurers in Threshold:
"It was the stronghold of a great king, Gygar, called 'the Gray,' and he ruled these lands, nearly down to the Dymrak forests, and nearly as far east as Penhalligon, some three hundred years ago. His lands were said to be quite prosperous, and the tribes of Traladarans that united under his banner were quite well off. There were others, though, who wanted his wealth and knowledge for themselves. It was said that the Hags of Dymrak either allied with or twisted the ruling Queen from a rivaling city-state, and they waged a great war, with the armies of Gygar clashing with the hobgoblins, goblin, and orcish ranks that this mad queen, Elendorath was her name, was able to bend to her will with foul magics from the hags.
"Well, fortunately, her forces soon turned on their own, and Gygar's armies were able to drive them into the mountains... but not before much of his kingdom had been laid to waste. Now, here is the interesting part.... If the stories are true, this Elendorath was related to Gygar the Gray. Some say she was his estranged wife. Other say she was one of his daughters. Whichever is the case, in the final battle between the two, the legends say, the queen had scored a crippling blow against the older king, and would have finished him off, had not his daughter, the Princess Argentia, intervened. It is unclear whether she or the king scored a mortal blow against the mad queen, but as she fell -- or retreated, as some stories say -- she pronounced a curse on King Gygar and his lands and people, and especially against the princess, who robbed her of her revenge against the king.
"Well, we all know what happens when a curse is pronounced and is influenced by a covey of hags. It came to pass, three times as strong. The king grew ill, his kingdom fell into ruin as crops failed and famine set in. It would be so, the Queen pronounced, until his daughter should die by his own hand. We know that the king died. We also know that the princess did, but not whether or not it was by his hand, or the work of the curse, or by some other means.
"The castle fell to ruin, and eventually all manner of evil creatures made their way into the dungeons beneath. There have been many expeditions into the ruins, but nearly all return with tales of monsters and shadows... and a vengeful ghost, prowling the halls, warning those away who would dare to intrude."