The Carnival Queen, also known as the Cacophony, was an entity created from parts of the Time Lords, which she called Watchmakers. Rassilon, the first King of the Majestic Clockwork, imprisoned it in a tiny corner of creation. She also considered the Gynoids her children.
Following Rassilon's lead, the Time Lords cast out the irrational parts of their souls, which congregated as a great cloud in the upper atmosphere of Gallifrey and were banished from the newly rational universe by Rassilon. He imprisoned it in a tiny corner of creation, the Time Vortex. The Time Lords forgot her and did not allow themselves to dream of her. (PROSE: Christmas on a Rational Planet)
The Carnival Queen herself has been shown to be incredibly powerful and possesses immense power, she created a billion possible universes with only her arm movement alone. (PROSE: Christmas on a Rational Planet)
The Carnival Queen described Gynoids as her children. Gynoids were robots that looked like women. They were not built, but simply were. They had a distorting effect on reality. (PROSE: Christmas on a Rational Planet)
The Carnival Queen was allowed back into the rational universe by a combination of Marielle Duquesne's psychic probing of the Time Vortex and Chris Cwej's tampering with the TARDIS. (PROSE: Christmas on a Rational Planet)