I just finished Jonathan Strange & Mr Norrell, so I feel like I should give you a detailed footnote.
The Lambstone of Derend was commissioned by the elven king Bahadel during the first War of Riddles. Though as everything involved in the Riddle Wars, even this seemingly straightforward assertion is much debated. Some scholars argue that Bahadel's request took place during the third or possibly even fifth War of Riddles, though prominent magihistorian Áki Vilhjalmsson contends that Bahadel was not even involved in its creation, and that it was the sole invention of the ambitious fairy Susitari Nim. What is clear is that Bahadel's fortress city of Derend was much affected by the stone. It was intended as a way for one to subdue one's enemies. The population would be become docile as lambs, and crumple before a conquering force. The power of the stone however was completely non-discriminatory, and as soon as the wielder of the stone attempted to use it, they became entirely content, and lost all their previous ambitions and designs. The entire city of Derend fell under the effects of the stone, and lived for a time in a greater state of peace and camaraderie than they had ever yet known.