Disclaimer: We do not own anything from the Elder Scrolls series.
Author's Note: Sheogorath is perhaps one of the most intriguing characters from Elder Scrolls IV: Oblivion. We're just giving him more screen time.
Long ago when the world was new, and the Nine Divines reigned over the world in peace and prosperity, the daedra were beginning to realize their true powers and forged, by the powers of dark majick, objects of tremendous and corrupting power. They often used these objects to tempt and lure mankind into doing their mischievous bidding. One of these daedra, Azura, created a stone that could trap living souls within it. This was the first soul gem, and it was called Azura's Star. In later days, wars would be fought over this mysterious object, and it would pass through many hands until being locked away in a vault. But this is the story of the first man to be corrupted by Azura's Star. His name was Sheogorath.
Though he is best known today as the daedric prince of madness, he had not always been that way. Even he himself had forgotten his early days, back when he had been a human. He had probably been the sanest of all people in his region, and it was for this reason that he thought he would be able to use Azura's Star without falling under its corruptive influences. He was wrong. As a young scholar, he sought out Azura's shrine, eager to prove his knowledge and mettle. Much to his surprise, Azura gave him the Star without asking as much as a single favor. That was unusual for a daedra, but Sheogorath was too enthralled by his prize to take this into account. His next task was to capture a soul. He was a very moral man, so it was no small dilemma for him to bring himself to kill someone in order to harvest the soul. He attempted to slaughter lesser creatures like sheep and chickens, but the Star did not seem to be receptive to their petty souls. It was not until he was taking a walk in the fields did he get a chance to take a human soul.
He was strolling through rows of corn when he came across three children who were playing hide-and-seek. There were two girls and one boy. Sheogorath recognized the girls as the daughters of the local farmers, but the boy he only knew as an orphan. He smiled at the children as he realized that this was his chance to take a soul that no one would miss. He bid the girls to hide, saying that he would make sure the boy counted without peeking. When the girls disappeared through the cornstalks, Sheogorath took his chance and leapt on the boy, who got out no more than a startled gasp before he died. The Star caught the soul, and that was where Sheogorath's descent into madness truly began. He used the energy in the Star to create a magic Staff of Flame. It became his prized possession, and he became a renowned and respected wizard. But that ended when the soul of the boy he had killed rebelled against him, making the staff itself erupt in flames. The resulting fire engulfed both Sheogorath and his house, and he was killed as his house and possessions were reduced to ash and cinders. All that remained was the Star, and Sheogorath's soul was caught inside it.
The Star was buried underneath the rubble, and as the years passed the rubble was covered with dirt that became overgrown with all different manners of plants and trees. Sheogorath was all but forgotten, and before long he was remembered only as the crazy wizard who had died in a mysterious accident. The whole time, however, Sheogorath's soul was still very much alive, and it was trapped in the Star.
When he first regained consciousness after being soul-trapped, he was surprised to find himself in a dark forest that was lit only by wispy, floating balls of bluish light that hung in the air overhead. The trees were black and leafless, their jagged branches clawing at the starless sky. Sheogorath distantly recalled being burned to death, and he wondered for a moment if he had been taken to one of the daedric realms to be tormented for eternity, as punishment for murdering the boy. But after wandering the dark forest for a while, it became apparent that he was not in a daedric realm because there was no one else here. He was alone.
Days passed, but he did not know this because it was always night. The sun never came up in this world. There were no birds to greet the dawn, or crickets to sing in the night. The only sound was a faint humming that came from the glowing orbs, which only disappeared when Sheogorath tried to touch them. He could not sense the passage of time. He did not grow hungry or thirsty, and he never felt tired. But eventually the constant darkness and isolation drove him over the brink of his sanity. He began to hear voices, and see things that weren't there. Sometimes he even smelled things that weren't there. At some point he started having entire conversations with himself, and by the time he became comfortable with his psychosis, it was as if his delusions materialized and became really real. Embracing this, he envisioned the dark forest into a shimmering land filled with plants and stones of various, startling colors. He created a gleaming castle made of purple stone that was filled with every luxury imaginable. He built a village and populated it with people who were various manifestations of his insanity, but that didn't bother him at all. Sometimes he even played all the parts. And with everything that he created in this little world of his, his insanity grew, and so did his power.
He did not know it, but the daedric power that had gone into creating the Star was gradually seeping into him, changing him. In the outside world, the Star had become black with the corruption of the soul within it, and after hundreds of years buried in the earth, it finally broke. Normally a freed soul would remain ethereal and be left to wander the world or be led to an afterlife, but those were cases for human souls, and Sheogorath had become significantly...different. He popped right out of that soul gem and found himself in the real world for the first time in centuries. A town had been built up over the buried rubble of his house (though by this point he didn't remember it), and he walked through the town out of curiosity. The people who lived there seemed very solemn and boring compared to the people in the village he created, so he killed a woman and cut her into pieces. He made her bones into flutes, her vocal cords and intestines into lutes, and her skull into a drum. He presented these gifts to the people of the town, who were so disgusted and appalled that they started to stone him. But they found that, to their horror, Sheogorath could not be killed, as his humanity had died already. Sheogorath found this whole thing amusing, and he decided to return the courtesy by imagining a rockslide, and it was so. The entire village was crushed, and Sheogorath went on his merry way, discovering that his abilities from his prison had followed him out into the real world. But what was reality, really?
Sheogorath decided to make his own world that he could share with people who shared in the gifts of his madness. He walked across the Shivering Sea, and he did not stop until he sneezed, bringing an island into existence. He formed the land so that it became like the place he had made within the Star, but it was bigger, brighter, and bipolar. On one side, he crafted Dementia. It was a land of darkness, depression, and confusion. On the other side, he created Mania, a land of sunlight, bright colors, and sweet dreams. In the very center of the island, he made a palace, and around that palace he made a city-half of it Bliss, the other half Crucible. He populated the island with creatures made of the stuff of nightmares and daydreams, and filled the towns with people who were really extensions of himself. The very first of the people was Haskill, who was the manifestation of the man Sheogorath had once been. Then there were the Golden Saints and the Dark Seducers, who protected Sheogorath's kingdom from the darker creatures that came out of Sheogorath's conflicted subconscious. When the work of creating was more or less done, he decided to tour the mortal world to seek out likeminded individuals who could join him in his new kingdom. And whenever he went out, he would open the door, hoping that unwitting humans might wander in and partake of the abundance of madness in his realm.