Who: I dunno, but it was probably under pretty benign terms, like the founding of Ponyville. In my headcanon, it was basically your average Equestrian town in the pre-Celestian, pre-Cutie Mark time period. Then a Cutie Pox Plague appeared (this one wasn't very well documented and according to the history books never happened, unlike the more-famous second one that appeared after Cutie Marks became common), and ravaged it. A long time passed, with the Cutie Pox becoming a legend passed from elder to filly, becoming warped out of proportion- compounded by the inadequate knowledge of diseases and their sources at the time the actual Cutie Pox Plague started. Then... the first true cutie marks appeared, with Rose being one of the first to get one- and it's mistaken for the curse that the legend said would kill her, then spread (in the show they were lucky enough to find the cure before Apple Bloom died of exaustion, and if she had, that's when the disease spreads- when the victim either dies of exaustion or gets a cutie pock [they're not marks, they're "pocks", or "pox"] for suicide or something)- and they bound her, gagged her, stabbed her around 13 times in the chest, and burned the body in her parents' fireplace (okay, most of the details were made up, but in the game her bones are found in a fireplace) What: I have no idea what cursed the town. Maybe the first laws making murder illegal and punishable with the worst punishments then imaginable were starting to be put into place, and the first version of the law was the curse. Or maybe while killing her, they accidentally performed an arcane ritual that summoned a powerful demon that proceeded to curse the town. I dunno. Why: Minna says in the game that the curse is their punishment for killing Rose, so there ya go- gives more weight to the law theory.