Perched on a low rise beneath Watcher's Knoll, Castle Krag was originally a drow outpost in the dark days before the founding of the Dale. Little more than the foundation remained when Jyordhan came to power and took the area for his own. On these ruins Jyordhan raised Castle Krag, his own seat of power, when he abandoned the Twisted Tower.
The original intent of Jyordhan was to raise Castle Krag into an imposing edifice on a par with Darkhold, west of Cormyr. Reality in the form of the limited resources of his Zhentish masters and the rebellion led by Sylune and Mane's Band altered his goal to simply one of maintaining control, and the castle was much smaller than originally intended.
The strongest protection of Castle Krag was Jyordhan himself, and with his disappearance and eventually reported death, the castle lost its greatest support. Jyordhan's minions sought to maintain control, but without Jyordhan himself, the populace rose in open rebellion. Under the command of Mane's Band and Sylune, the castle was stormed and set fire, Jyordhan's minions having abandoned it for more pleasant territories.
Since that time, Castle Krag has been an abandoned ruin. A single tower remains upright, and with massive renovations the building could be habitable again. The area around Castle Krag has returned to briar and tangled undergrowth, and the path leading south to the North Ride is mostly overgrown.
The Castle Krag of Shadowdale should not be confused with the similarly named Castle Crag, located south of Gnoll Pass and within the new lands claimed by Cormyr.