The Diadem was a mind parasite which seemed to be a tiara inhabited by an evil intelligence. It was implied to be similar to the Keller Machine mind parasite.
The Diadem was first seen on Pakha, where it possessed a Pakhar forager named Vor'r'na and plunged the native inhabitants into centuries of war with each other. However, there were some pacifists who attempted to change their society. The Third Doctor and his companion, Jo Grant, arrived on the planet and defeated the Diadem when the mad Vor'r'na fell into a bottomless chasm with the diadem. The Doctor, however, doubted it was completely destroyed.
Some time afterward, in his seventh incarnation, the Doctor heard that there was an expedition that aimed to recover the lost diadem, and sent Ace to accompany the team. Upon finding it, Professor Sharrod touched the diadem and fell under its influence. He began to murder his accompanying students, who he feared were plotting to conspire against him. Another group, composed of mercenaries, shot the professor and took the artefact back to their spaceship and placed it in a vacuum case. When Ace pursued them and fired an EMP at the mercenary ship, it knocked out the safety seals on the case and enabled the diadem to exert its influence on a mercenary named Sadler. (PROSE: Legacy)