Corruption

'One last thing sire. Killing innocents... and I'm using the term loosely... increases your corruption, so it creates more evil energy that amplifies your power'

Gnarl explaining to the Overlord for the first time how corruption can be accelerated

Corruption is the game mechanic in Overlord that represents the player's level of Evil-dom.

Certain choices will affect how corrupt you are. Being evil also increases your power. As you become more corrupted, spikes will grow out of your armour.

A highly corrupted Overlord is surrounded by a red haze (starting from 50% corruption) and his armor is darker and has more spikes at the knees and elbows, whereas the armor of an uncorrupted Overlord remains shiny and has fewer spikes. If you are not corrupt, people in every domain will cheer and say nice things to you. But the choices are entirely up to the player. Just know that each have their benefits.

The Dark Tower changes based on your corruption level. From 0-20%, the tower throne room view will be a normal blue sky. From 20-40%, a dark violet Evil Cloud cover begins to partially surround the tower, while some parts are still blue. From 40-60%, the sky will start turning red with some normal clouds. From 60-80%, the red sky starts to turn violet and the sun will be nearly blocked. From 80-100%, the sky will be completely covered with dark violet clouds, darkening the tower even more, with the sun being a small white dot in the sky. It appears that the Tower Heart caused this 'corruption' to manifest in the Overlord, collecting evil energy and imbuing it into the Overlord, dramatically increasing his power but making him more evil at the same time. In Overlord 2, the Overlad has no spikes regardless of alignment, proving that the Tower Heart was what caused the spikes to appear and generated the red haze. The theme of the Dark Tower changes as well; the more corruption the Overlord has, the more spikes form on the tower.

Increasing Corruption

Simply wipe out enough innocents:

3% — You have killed a friendly peasant. An unfortunate accident or the start of an Evil rampage?
Kill any innocent peasant in Spree (lock on peasant and attack).

5% — You have killed 10 females, Wenchbane!
Kill 10 female peasants in Spree.
5% — You killed 20 peasants. Are you holding back?
Kill 20 innocents.
2% — You are a Harasser of Humans and the people of Spree don't like you anymore.
Just kill a few peasants in Spree.
2% — Now you've Suppressed Spree. The people officially hate you.
You must attack a peasant in Spree, and continue to kill them until they stop attacking and start begging (their target becomes green again).
10% — You have killed 100 peasants. Got a taste for it, have you?
Continue to kill peasants not only in Spree, but in Heaven's Peak as well.
15% — So many lives lost. So much Lifeforce for you. You are the ultimate Enemy of Mankind.
You need to kill a total of 500 peasants for this one.
5% — You have killed 10 Elves, you are hereby known as Destroyer of Elves.
Not the ghost elves mind you; the eleven (living) slaves you encounter.
3% — You kept the peasants' food. Your Minions are happy, the peasants are not.
Keep the food you find in Melvin's Kitchen, which gives you +50 brown Lifeforce. This is the sin of Gluttony.
10% — You dumped Rose in favour of her sister Velvet.
Once Sir William is no more, order your minions to carry Velvet's bed, instead of turning the wheel near Rose. This is the sin of Lust.
10% — You traded the Elven Race for lots of lovely gold.
Once you beat Goldo at the Royal Halls in the Golden Hills, you chose to save the 10,000 gold and not the female elves. This is the sin of Greed.
5% — The Mother Goddess statue looks great in your Tower. The Elves are a bit upset.
Once you capture Jewel, and return the Mother Goddess statue from the Ruborian Desert, you chose to keep the statue. This is the sin of Envy.
5% — You gave your traitors the punishment they deserved.
After freeing Spree from Kahn, you chose to kill the traitors near the inn. A quick target lock and Inferno spell does the trick. This is the sin of Wrath.

Other Evil deeds:

2% — You trashed all of Spree's houses, Homewrecker!
Break down all doors of the Spree homes and send in your minions until smoke comes out of the houses.

3% — You have 'persuaded' Spree's peasants to come and work at your Tower.
After doing 'Suppressor of Spree', return to the tower and go back again to the Mellow Hills. A peasant with a sacrificial 'virgin' girl bound to a wooden frame will appear, offering her in the hopes that you will show mercy towards Spree. Attack her and then make 2 minions carry her to the tower gate. You need to explore most of the Mellow Hills area, not just the village of Spree. You can recognize them by their lines like 'I'll not come with you, sheep murderer.' and 'Take my Sister, she's the prettier one.' When you catch them all, return to the tower and you'll have an amusing dialogue of Gnarl giving orders to the maids.
3% — You trashed all of the houses in Heaven's Peak, you Town Trasher.
There are only four such houses, spread out over the city. Again break doors, then send in the minions.
2% — You caused a bar room brawl in the Halfway to Heaven Inn.
At the inn, simply attack somebody there.
5% — The Sacred Grove is a blackened wasteland.
In the Evernight Forest burn down the grove with a Fire spell, or usually the Reds will beat you to it. This is the sloth sin.
5% — You've fattened the slugs by feeding the Elves to them.
You need to open the gates for the elves in the Glittering Mine to then let the large slugs devour them, for ultimate evil. Killing the slugs and then killing the elves yourself does *not* work, and does not yield negative "good" Corruption either!

100% Corruption total.

Decreasing Corruption

There are a few decisions the Overlord can make to reduce Corruption, thus letting you "accidentally" do a few bad things, but still end with 0% Corruption. Staying on the "good" side is all about *not* doing anything bad, i.e. attack innocents.

2% — You selflessly returned the food to the fat peasants.
Return the food you find in Melvin's Kitchen, granting extra sheep and a ram in the pasture nearest the tower gate, good for 6 extra brown life force each time the area reloads, these extra sheep will stay for as long as you don't suppress Spree.

2% — You chose to keep Mistress Rose.
Once Sir William is no more, you kept Rose instead of choosing Velvet as your new mistress.
2% — The Elven race will live on, thanks to you.
Once you beat Goldo at the Royal Halls in the Golden Hills, you chose to save the female elves, graciously rejecting the 10,000 gold you could have picked up instead.
2% — The Elves are singing for joy at the return of the Mother Goddess statue.
Once you capture Jewel, and return the Mother Goddess statue from the Ruborian Desert, you chose to return it to the elves.
2% — You were merciful to your traitors.
After freeing Spree from Kahn, you chose to simply do nothing to the traitors near the inn, thus showing mercy.
2% — You have recovered the health upgrade without damaging the Sacred Grove ' Go in the evernight swamp gate and continue to the right of the arcane blood altar and retrieve the health upgrade from the grove, without using fire spells to burn it, and without using reds, because they'll attack the unicorns on sight.

-12% Corruption total. Note you will never have a negative Corruption value.

Equivalent

Tyranny Rating in Overlord II.

Even if the Overlord in Overlord 2 has full Destruction or Domination, his appearance will never change, but concept art shows the Overlord with blue horns and a glowing body, indicating that he was supposed to change as he did in Overlord.

Endings

The Corruption Value determines whether you get the good ending or the evil ending. You get the good ending for having Corruption 0-50%, and the evil ending for Corruption of 51% or higher.

100% Corruption Lecture

Side by side comparison of the Third Overlord in Arcanium armour at 100 and 0 % corruption.

The Very Land bore the mark of his corruption (Video of the overlord using Inferno Spell on Evernight Burning down the forest with praising minions)

The people lived in Fear; they spoke his name in whispers. (Video of Heaven's Peak City burning with red minions and scared citizens)

He Killed, Pillaged, and Destroyed without mercy. (Video of peasants in heaven's peak underground level 2,being executed and possibly sacrificed in the smelter, with Giblet and other browns including the Guard minion.)

He Became Evil Incarnate (a peasant being tortured by a brown minion with a spear with the Overlord watching)

The Third Overlord Fully Corrupted,note the red armor and spikes

Trivia

It looks like it was intended for a 'good' Overlord to also have servants without having to kidnap them, with peasants voluntarily going to the dark tower after the overlord helped them out. Some audio dialogue is still left in the game files, but it was probably dummied out because it seemed too evil for a 'good' Overlord.

Like the Jester, you could probably hit Gnarl for amusement. Dialogue like 'Ah like the old times' 'I've said something wrong?' and 'Why are you hitting Gnarl?' still exist in the game files, hinting that this was also dummied out.
You might have been able to destroy the Temple of the Mother Goddess in Evernight. The audio files have an additional line of dialogue spoken by the Jester, who gives you the title 'Destroyer of the Mother Goddess Temple'.

It should be noted that if one was to only commit normal corrupt acts, and not ones that have to do with the seven sins, then the added negative corruption will cause the player to have exactly 50% corruption value.

Trivia

Gnarl mentions that the corruption forms not only in the overlord, but in all evil creatures such as the minions and the Halflings over time, so it's inevitable to become evil.