Terra is the planet where Might and Magic III: Isles of Terra takes place. Unlike VARN-4, CRON, and Xeen, Terra is a real planet on which Sheltem lands with six biospheres.
Sheltem the Dark was originally designed to be the overseer and "Supreme Law" of Terra, but a fault in his programming convinced him that his creators, the Ancients, were working against his goal to protect the planet. He therefore launched an interplanetary campaign against his creators.
According to a local legend (which is related by Corak himself), the isles on the planet were once a far-away land that was accidentally populated in a great battle between the Elemental Lords, who then made a temporary ceasefire to destroy the new lifeforms. The Forces of the Dome, a group of supernatural entities, wanted to protect them without opposing the Elemental Lords directly, so they picked ten champions among the mortals and gave each of them a class. Once victory was assured, the Forces picked up the land and took it to Terra, where they broke it into isles. In truth, this is a dramatization of the actual facts: the Isles were, in fact, parts of a VARN that was set to be integrated into Terra, but it crashed, breaking into pieces, the pieces becoming islands on Terra's surface.
Sheltem always viewed the isles and their inhabitants as enemies, and did his best to destroy them. Eventually Corak the Mysterious, a servant of the Ancients, arrived to deal with him. Their long struggle, which went from planet to planet, only ended when Corak sacrificed himself to destroy Sheltem on Xeen.