In the mythology of Auron, the Thaarn was one of the seven gods who created human life and promised it great gifts. But the Thaarn feared the people of Auron might come to rival his power, and in his rage killed one of his fellows. The other gods exiled the Thaarn 'beyond the threshold of space and time', where he plotted to become Master of the Universe.
The Thaarn encountered by the Liberator had made his base within what appeared to be an artificial black hole, which might possibly be described as outside normal time and space, and he did have an unusual and unexplained interest in Cally, a native of Auron. It did not appear to be an actual prison, though.
On Crandor, the Thaarn's full title was 'the Lord Thaarn, Master of the Universe'. The Thaarn was reclusive and left most matters to his lieutenant, the Caliph of Crandor. The inhabitants of Crandor were slaves employed in building an immensely powerful gravity generator from materials attracted to the planet. Many of the slaves had been promised rule of their own planets when the Thaarn realised his ambitions, though the work was slowed by the Thaarn's refusal to allow even the simplest computers to be used in any of the necessary calculations (he feared any intellect that might rival his own).
When the Liberator was drawn to Crandor, the Thaarn made telepathic contact with Cally, insisting he had been waiting for her and wanting her to join his cause. However she was (rather easily) able to trick him into deactivating the energy isolators that neutralised her weapon and those of the rest of crew. They were able to escape and, with the aid of Groff, reversed the gravity generator. Crandor broke apart but the Liberator detected a small ship leaving which they assumed was the Thaarn escaping.
Cally saw the Thaarn, who appeared to be a wizened dwarf with a huge skull. She did not tell the others this.