Loki is a Norse trickster-god who evolved from a naughty and troublesome prankster to an ever-more destructive and malicious entity throughout the many stories of Norse lore until he was ultimately punished by the gods for his treachery by being bound to a rock with the weight on the world and the guts of his own son until the day of Ragnarök while a serpent drips poisonous venom onto him from above. His wife Sigyn (loyalty) sits shivering next to him and tries to catch the venom in a cup, but if it burns her hands or when she has to empty it the venom drips into his eyes and his screams and struggles are earthquakes.
Perhaps unsurprisingly, Loki is said to lead the evil forces of Ragnarok once freed in an apocalyptic war against the gods, according to most legends during this battle he and the god Heimdallr shall face in combat and slay each other.
It can be reasonably inferred that the reasons for his decent into madness include having his children stolen from him for being monsters, being coerced into having sex with a horse, getting his lips sewn shut for the crime of losing a bet and other such cheerful things. He also would have known his own destiny beforehand, as most of Norse mythology is a prophecy. Indeed, Loki and his children were horribly mistreated because of things that they probably only did because they were horribly mistreated. Odin does not seem to have groked the concept of such a prophecy being self-fulfilling.
In Modern Media
Loki is one of the most infamous of the Norse gods and has been described in many films, comics, videogames, and books, as well as traditional lore - his monstrous children are equally famous in the form of the giant wolf-monster Fenrir, the world-serpent Jormugandr and last his own daughter, the Norse goddess of the underworld named Hela (who is the child of the immortal giantess Angrboda, Loki's first wife).
Some of the most famous incarnations of Loki in modern fiction has been the supervillain in Marvel Comics, in which he is basically a slightly updated and toned-down version of the trickster god of folklore and the villainous Loki from the Son of Mask - who was considerably less like his mythical counterpart and more in line with a run-of-the-mill evil magician/prankster.
Loki has also appeared in the Stargate series - in which he was a rogue Asgardian conducting illegal experiments on humans - this version of Loki is even less like the mythological one than the version in Son of Mask and is in effect an archetypical alien invader akin to the Greys seen in series such as the X-Files. Other incarnations of Loki and characters inspired by him have appeared in innumerable works of fiction - probably too many to list here, these are just a sample of the few that are aware of by all.
Powers and Abilities
Loki is depicted with many different powers at his disposal, in fiction and in folklore, shapeshifting seeming to be one of his specialties in the old tales while, as a god, it is specifically reasonable to assume he could pretty much do anything he desired - though he would not have anything like the power of a god such as Odin.
Unusual for a Norse god Loki was said to have a large degree of command over monstrous creatures such as trolls and giants, traditional enemies of the gods - though this could be down to the fact Loki himself is sometimes considered a half-giant and is the father of a few notable monsters himself. Also, while not on Thor's level, Loki seems to have a enormous degree of superhuman strength, causing earthquakes every time he writhes in pain.