Gem of Immortality
The Gem of Immortality was a magical artifact that made Mondain nearly impossible to defeat. The Avatar defeated Mondain by shattering the gem.
Once the gem was shattered, different realities were created- one reality contained within each shard and near infinite pieces of gemstone dust. It was this splintering that created the Shards of UO upon which our characters all live. Other shards of the Gem, presumably not the same ones the characters all live on, were taken by Lord British to the Ethereal Void to guard them from Minax.
Ultima Lore also details how three shards of this gem were lost and forgotten, buried deep within Sosaria. After decades of hiding, the shards were uncovered due to subterranean earthquakes when the Avatar removed the Codex of Ultimate Wisdom from the depths of the Abyss.
Three luckless humans, pulled to the underworld through a whirlpool happened across these shards, and were soon possessed by malign forces. Thus, the Shadowlords came into existence.