The Death Zone was an area on the planet Gallifrey created in antiquity by the early Time Lords. Using a machine known as the Time Scoop, creatures would be taken from normal space-time and deposited in the Zone, where the Time Lords pitted them against one another to the death. The use of the Scoop was banned by Rassilon, whose tomb was eventually placed in the Dark Tower within the Zone. The Death Zone remained empty and unused for many years.
However, President Borusa, corrupted by his power, used the Scoop, taking four incarnations of the Doctor, his friends and his enemies, and trapping them in the Death Zone. He hoped they would give him access to Rassilon's tomb, where he would gain true immortality. The Doctors did unintentionally help him enter the tomb, but all Borusa gained was being trapped there as an undying but immobile bit of stonework. The Death Zone returned to inactivity.
A simulation of the Death Zone- with some slight differences from the real thing- was revealed to have been created by the mind of Rassilon in a sealed-off region of the Matrix, accessible through a secret door in Rassilon's tomb.