The Witch of Izalith was one of the deities that defeated the Dragons long ago. She was the leader of the flame sorcerers, "The Witches of Chaos". The Witch of Izalith gained a Lord Soul, and used it to weave great firestorms to defeat the Dragons.
She ambitiously attempted to recreate the First Flame with her Lord Soul but instead she spawned the Flame of Chaos. When she failed to control the new flame, it consumed her and molded her into a twisted being known as The Bed of Chaos, the source of all demons. Most of her followers and children were also consumed by the Chaos Flame and were similarly transformed.
The whereabouts of her daughts can be found on the Children of Chaos page.