Carvil was a Time Lord. He had a wife and children, but they were killed by the Daleks which caused him to develop a strong hatred of the Daleks. As a result, he manipulated events on the planet Derilobia to create the illusion that the planet had been attacked by the Daleks so that he could turn the entire planet into a weapons manufacturing facility, with his goal being to create vast missiles that would be able to destroy all of the Daleks' ships. Carvil was officially commanded by Major Tamasan, but she maintained a degree of distance from her underlings' efforts to officially allow them to do their jobs as they saw fit.
The Eighth Doctor discovered Carvil's plan when he took his new companion Bliss to Derilobia, as it was her home planet before Carvil's actions changed history in a manner that suggested Bliss was now never born. After learning what Carvil had done, the Doctor rejected Carvil's protests that it was necessary to go this far to destroy the Daleks.
When a Dalek agent was able to make contact with the Daleks, the Time Lords were forced to evacuate with Carvil being left behind as his TARDIS was sacrificed to provide power to all other TARDISes attempting to escape the Daleks' trap. (AUDIO: The Lords of Terror)