Morgan Le Faye came to Gielinor in the Fifth Age, when the portal between Britain and RuneScape was opened up. She established the keep with her son, and gathered followers, who became the Renegade Knights. She waited her time and began devising plots to destroy King Arthur.
Morgan Le Faye hunts down Merlin and traps him in a crystal, to weaken the Knights of the Round Table. Merlin is found and taken back to Camelot. An adventurer finds out, and agrees to help the Knights, by first infiltrating her keep. Her son attacks the Adventurer in the keep, but before the final blow is delivered she appears and begs for the player not to kill her son and in turn reveals how to free Merlin. Angered at her failure, she begins planning again. After entering a deal with the Black Knights, they storm Camelot and capture the knights. According to the deal, Morgan gets the knights if she turns King Arthur into stone for the Black Knights to take home. She locks them in her jail. She also gets the Adventurer who stopped her plans last time. However, the entire plan backfires when the player frees the knights, ending in the slaughter of the Renegade Knights and the freeing of King Arthur. There has been no sight of her since.
Her only ability is her powerful Magic powers. She is able to sense her son's danger and teleport anywhere. She is able to turn people into stone. She can hold her own against the very powerful Merlin and then trap him in a Crystal. She is able to knock people out with a spell very easily. Other than that, not much is known.
If you interrupt the conversation then talk to her you will get the message "Nothing interesting happens."
Morgan Le Faye is based on the character Morgan le Fay from the King Arthur legend. In the legend, she is Arthur's half-sister through their mother, Igraine. After Arthur declared that he was going to rule a Christian kingdom rather than the preferred religion, Paganism, Morgan le Fay sends her sister (and Arthur's half-sister too), Morgause, in disguise to seduce Arthur yielding her pregnancy. Arthur's illegitimate son's name was Mordred, as in RuneScape, however, Mordred is Morgan le Faye's son. This son was meant to be held over Arthur's head as he rules.