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As the heroes travel around Ferelden on their quest to expose Loghain and stop the Darkspawn, nearly all the villains and hardships they encounter are in some way caused by Loghain or at least done by someone supporting him, such as hiring assassins to kill the Grey Wardens, allowing Arl Howe to torture innocent people in his dungeon, and enabling slavers to kidnap citizens in the Denerim Alienage.
Towards the end of the game, a “Landsmeet” is called between Loghain and those in support of the main characters, where a large argument occurs in which Loghain defends his actions by saying it was the king’s fault for getting himself killed by directly commanding his troops from the front lines, which was due to him believing the Grey Wardens’ misleading tales portraying war against the Darkspawn as glorious and relatively simple, and that Loghain was required to enable these atrocities for the sake of the war effort in order to avoid being destroyed by the Darkspawn.
A massive fight then breaks out, but an old woman councilor quickly stops it and calls for order. It is decided that Loghain and a champion representing the heroes should have a duel to decide the issue, and the player can choose any playable character to fight him. Afterwards, Loghain surrenders and if you spare him, Alistair, who was the king’s bastard son and thus technically the rightful heir to the throne, is outraged and absolutely refuses to let Loghain live. Unless you allow Loghain to be killed, Alistair is either banished forever or executed to prevent him from starting an uprising.
If spared, Loghain is punished by being put through the “Joining” ritual to become a Grey Warden, which consists of drinking Darkspawn blood, and is very painful and often fatal. Loghain survives and then becomes a playable character for the remainder of the game and the final battle.
When it is explained that the Archdemon Urthemiel can ‘’only’’ be killed by a Grey Warden, and that the Grey Warden in question dies afterwards, Morrigan offers to avoid this by having sex with Loghain in a dark magic ritual which will impregnate her and produce a demonic baby who will absorb the soul of the Archdemon and become an “Old God”. If this offer is declined, depending on how the final boss fight is played, Loghain will die if he is the one to deliver the final blow to the Archdemon.