Curse

The curse was performed by a secret cabal of spell casters known as the Cult of the Arcane, looking to bend the powers of life and death to give themselves immortality. This created the necromancy school of magic, but also set off a cascade of changes that eventually tore apart the two great empires of the world, and shaped the lives and natures of many races.
In the course of the Curse, the Cult harnessed power from the worshippers of the Death Gods to kill the Prime Death God. Their stated goal was to make all of the members of the Cult into gods, but in reality, the Leader of the Cult of the Arcane made himself into a god while the rest became mere arcane liches.
The Curse was performed within what is now the Sandsea, drawing upon the lingering corruption of the Abyss.

Manifestation

Aside from the creation of necromancy and thus undeath, the curse did the following:
Many of the elves living in the province where the curse was were all warped by the power of the moon, turning into lycanthropes of various kinds, of which wererats have fared the best.
True dragons' reproductive abilities were warped, causing their eggs to hatch as lesser dragonkin or not at all. The only protection from this curse was found to be at the Throne of Tides, an island with an elemental waygate that leaked power from other realms.
More and more elves born after the curse were born as reincarnations of previous elves and tranced instead of sleeping.
Positive energy magic was unaffected by the curse, and became the antithesis of necromancy.

Localization

The Throne of Tides is partially shielded from the curse by an elemental waygate. In ancient times, it was a thriving land where races descended from the elemental planes mingled with each other and traded with the neighboring elves, humans and hobgoblins. The curse's effects on dragon reproduction forced dragons to conquer the Throne of Tides, setting off a cascade of upheavals as other races reacted to this change.
The northern province where the elven ritual was enacted, meanwhile, has become a desert as a result of the arcane forces unleashed there. Once the breadbasket of the elven empire, now the few residents eke out a living in the wastelands.

Type

Metaphysical, Demonic