Three nights before the gathering of the Spectral Services, Zatanna went on Terry Thirteen's book presentation, instead of purifying her thoughts before the ritual.
After coming home, she had cast the spell "Gnirb Em Eht Nam Fo Ym Smaerd" ("Bring Me The Man Of My Dreams", spelled backwards).
In fact, she thought this spell will bring her some wizard that would be just like her, but, instead of it, she freed the ancient entity called Gwydion (in fact, "Gwydion" is an early name for "Merlin", royal were-dragon from Celtic legends, but it's unknown if it is really him or some demon that merely uses this name).
When the members of the Spectral Services met in the house of Baron Winter, concerned with the dreams of a coming threat, she brought them to the "imagined world", as she called it. Then they wound up in the Never-Be-Found realm, the place where the Red God of Ys was trapped by Zatanna's father.
Soon the universe started to eat itself and Zatanna had no other choice than to conjure a portal to somewhere. After teleportation they found themselves in world where all human thoughts existed in the form of the books. Hoping to find the secret books of her father, Zatanna went forward and once again faced Gwydion who killed Ibis the Invincible, Terry Thirteen, Taia and Timothy Ravenwind.
Zatanna was unharmed, but lost all her magical powers. When she returned back to our world, she found that all that remains of members of the Spectral Services is their smoldering skeletons.
After this accident, the Shapeless One (the name that magicians gave to Gwydion because of his ability to take any form) started to haunt her. Eventually, she again encountered him in Cassandra Craft's shop, where she trapped him in the Cabinet of Ali-Ka-Zoom and then placed him in the bottle where he took his true form - a little nude homunculus.
He didn`t display his negative characteristics again, and actually helped Zatanna a few times during the Seven soldiers-saga.
Unforunately for him, he`s currently a resident of comic book limbo. Meaning, he hasn`t been seen since.
Powers & Abilities
Gwydion can turn himself into anything, including fire, water, steam, a cat, or even the text from a book.