Death Spiral

Death Spiral or otherwise known as the Spiral of Death is a magic rite conducted by a group of magic casters. The famous practitioners who were known and capable of performing this ceremony are members of Zuranon, a death cult.

Background
One particular characteristic shared among Undead is that stronger ones tend to automatically spawn in places where many lesser or weaker undead are gathered in groups. Then, when there are places filled with more powerful undead compacted together, even stronger undead are born. Henceforth, whenever more powerful undead gathered, even stronger undead would be born as the cycle continues to repeat itself.

Because of that, the magic rite which made use of this property was called the Spiral of Death, constantly spawning ever more powerful undead beings. The real goal behind the Death Spiral is to perform a ritual with the intent of gathering all the negative energy that is generated and seal it inside oneself. As a result of this process, the Magic Caster can potentially turn into a powerful undead like the Elder Lich for instance.

The Dark Warrior Arc
Khajit and other members of Zuranon had set up a base of operations in E-Rantel in order to perform the death spiral ritual. However, Khajiit and his fellow Zuranon members were stopped by members of the Adventurer group known as Darkness before they could complete it.

Abilities and Power
Death Spiral had the power to turn a metropolis consisted of living beings into a city of the dead where the undead can roamed freely about. Through doing so, the undead were able to naturally spawn on its own continous cycle from weaker to stronger kinds over time if they're clustered together. Conducting this ritual was potent enough to even destroy an entire city due to the amount of living sacrifices needed. After the Death Spiral is properly conducted, it is now indeed possible for even a magic caster like Khajiit to transform oneself into an undead being by harnessing the negative energies from such a place full of undead. In other words, the Death Spiral is supposedly the act of feeding into that chain reaction to create a limitless more powerful undead nonstop once the ritual is completed.

Trivia

 * Unlike Khajit's failure of carrying out the Death Spiral, it was said that this wicked ritual had once been conducted successfully in the past by other leading core leaders of Zuranon. At least, that was the official story though people in the know are aware of what really happened.
 * As stated from above, that version of the story is also slightly off. The Spiral of Death is nothing more than a failure of a magic ritual based on an incorrect explanation that was given two hundred years ago due to a misunderstanding.
 * This ritual was introduced in Volume 2's Light Novel.