The Magical Plague was an event caused by the Tower Heart's energy when it exploded, the Great Cataclysm, leaving behind the devastated Wastelands, mutating creatures that came in contact with the plague. This event precludes, but shows its ramifications in Overlord II.
The Plague manifests in humans as turning their skin blue, and causing them to attack anything that's not infected. In Minions (excluding Blues) however, it causes them to grow in size and sprout horns similar to the reds horns, gain dark purple skin, and black claws. Anything that is infected becomes immediately hostile to its former allies.
The plague could also twist other native habitants like slugs, causing them to excrete magical ooze and have complete immunity to the magical ooze.
It's however likely that a majority of life died from the magical plague rather than having been mutated (evidenced by the lack of natives in the wasteland) as the sky is now raining ooze.