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Vritra was a deadly Dracolich, born from Indra when he underwent a separation of his two halves. This was due to him having performed a ritual to enhance his power, which would take away all of his impurities right away. However, he had so many accumulated, which were all mixed with miasma that it ended forming a new and powerful entity named Vritra.
In the mortal continent where the Draconic Fathers governed, there was no Undead, however, when Vritra was born, he naturally held the power of Death, and used it to bring forth the dead in the continent.
After Vritra's changes, souls would no longer go directly into the transmigration cycle, or perhaps not as much, and they ended wandering around the area where their bodies died. Thanks to the mana and miasma of the environment, they would turn into a ghost, or possess other corpses or inanimate objects and become all sorts of undead creatures.