Villains. As Randy Milholland of Something Positive once said, they need to be the most interesting person there. That goes double for fantasy, so heavily defined by the clash of ideology and tribe. Which probably explains why fantasy has so many great villains. Here's a bunch of them, trying to keep them to books I don't go about all the time for once!
Spoilers follow for Codex Alera, Dragonriders of Pern, Order of the Stick, Kushiel's Legacy, Heralds of Valdemar, The Invisibles, The Wheel of Time, Tigana, and Harry Potter.
Attis & Invidia Aquitaine Codex Alera, Jim Butcher
Sometimes I don't know why this series isn't bigger. It's a big powerhouse of an Epic Fantasy by one of the genre's biggest names, easy reading with no end of dramatic moments. It mightn't be one of the genre's best (although its pretty bloody good), but its probably something most fantasy fans might enjoy. Maybe the huge variety open to us has taken us away from such safe notions? In any case it also features some great larger than life characters, including its villains. I could have gone with a few different names but decided to go with this vaguely MacBethian power couple, who make a great first impression as arrogant warlord and implacable schemer, but grow into a more human, complex pairing as the series go on without ever departing from their core identity.
Lord Holder Toric Dragonriders of Pern, Anne McCaffrey
Some villains are great because they're larger than life figures, fit for fairytale and history book alive. Others are great because they're horrifyingly realistic in a way everybody recognizes from real life; petty, selfish, entitled, always living another day because they're protected by society and their own cowardice. Toric's journey into this archetype is a gradual and enjoyable one, particularly when thwarted.
Xykon Order of the Stick, Rich Burlew
Back to larger than life or in this case, unlife. Xykon is a sorcerer liche hellbent on nothing less than world domination by any means necessary as long as they don't involve much more than constant carnage on his part. It can be difficult to make a villain both scary and funny in comedic fantasy but Burlew makes it look easy. In no small part that's due to Xykon's cast of browbeaten minions (or so he thinks), but Xykon's raging sociopathy, love of a corny joke, and incredibly impressive amount of magical firepower all combine to make him the perfect scenery chewing villain for such a story.
Melisande Shahrizai Kushiel's Legacy, Jacqueline Carey
Sometimes a villain doesn't even need to be seen that much to throw a colossal shadow over the book. Melisande is a superb example of this. Impossibly beautiful, supremely manipulative, and utterly ruthless, Melisande is to femme fatales as the sun is to candles. It is not just her ambition that makes her so compelling as the way everybody around her melts, even when they don't want to. As the series progresses, she starts to become more than just another power-hungry villain as he goals widen and deepen; but her supremely dangerous nature never does.
Lord Orthallen Heralds of Valdemar, Mercedes Lackey
This one's very spoilerific as he starts off as a warm friend to the crown, but it doesn't take long for his true colours as an utter dickweed to be revealed to the reader. It takes a lot longer for the crown to realise, which means there's a solid six or so books where he gets to be the nefarious threat to the throne positioned right next to it, carefully maintaining his innocence while being up to no good. He's like Littlefinger without the creepy sexual stuff.
Sir Miles Delacourt The Invisibles, Grant Morrison
My second comic nomination, Sir Miles is the main enemy to the titular Invisibles. He's the very model of a modern Etonian conspiracist-occultist, all suppressed humanity and snobbish glee. He's the ideal foe for Morrison's huge parable of liberty vs control and what he lacks in subtlety, he compensates for with sheer entertainment value.
Elaida The Wheel of Time, Robert Jordan
The Wheel of Time is a masterpiece of villainy in this writer's humble opinion; no writer put more effort in humanising the irredeemable without giving them redemption. I picked Elaida though as the one who sees herself as most in the right and also, the more hilariously incompetent. I like magnificent villains, but I love villains who just trip themselves up. Throw in more than enough petty malice to enjoy hating, and just enough sense of the world to not be utterly hatable.
Brandin Tigana, Guy Gavriel Kay
Arguably my favourite villain of all. In many stories, Brandin would make a fine hero. He is witty, charismatic, brave, intelligent, and possessed of a degree of morality. Yet in this story he is the villain, and he deserves for it despite his greatness in many ways, he lacks consideration for those outside his immediate circle of love. This flaw can be forgotten at times, yet it is the prime mover in this story.
Dolores Umbridge Harry Potter, JK Rowling
Finally, a classic, and back to the larger than life vs disturbingly believable. Umbridge's half-hidden malice and use of the system is very believable. I've been lucky enough to only ever have teachers and bosses that are on the edge of the Umbridge territory, but that was close enough and I've heard stories. Voldemort's good fun to read about, but Umbridge is just downright creepy.