The Pendant of Bandos is found in Bandos' throne room during The Chosen Commanderquest. It seems that when worn by an individual, they are possessed by Bandos. During the quest, Zanik wore the pendant (dream) and Bandos possessed her. With Bandos controlling her actions, she killed Sigmund, and started fighting the player, who defeats her innumerous times (as the Pendant heals her) until she is convinced to remove the Pendant. The pendant is then worn by the goblin High Priest, who then transforms into the Bandos Avatar. After defeating it, the pendant is finally destroyed by Zanik and the player.
Bandos created the Pendant near the end of the God Wars, planning to start using it after the Edicts of Guthix were put in place. He stored a huge amount of power in it and left it on Gielinor as he was banished, intending it to be worn by his Chosen Commander (Zanik) in the distant future aiming to possess her and use her to conquer Gielinor. His plans were ruined by the player during the The Chosen Commander quest, who destroys it after defeating the Bandos Avatar using the upgraded Zanik's Crossbow.