The item doesn’t need all this justification. If you have story with Lycanthropy in it, then a magical cure (permanent or temporary) is already justified simply by the nature of beasts. You say as much in your teaser. Nor is your story of its creation a novel one. A small isolated community beset by monsters and mother who loves her child so that much she is willing to risk the greater good to protect it are very old chestnuts. You use a lot of words to go through some very simple and familiar concepts.
These facts regarding the item are also sparse, vague and the will not help players to understand or use the items more efficiently. In your Mercurial Chain Sword (http://strolen.com/viewing/Mercurial_Chain_Sword) write up, which I thought was very good, the facts you give could help player to manipulate the item and understand its “physics”. In another excellent write up of an item, http://strolen.com/viewing/Gideons_Mercy, the backstory helps the characters and the GM to understand the items moral compass. It also justifies the existence of an item which unlike this Chakram, is not of necessarily intuitive. I found nothing wrong with this post, but nothing special about it either. Maybe I am missing something, I do that, Checka thought it was perfect.
I think you meant possessed by an “angel” not an “angle”. Don’t take that as condescension, I am mystified and impressed by anyone that get all the errors out of a piece of prose.
Yes! I agree with everything you said, you set things up perfectly. I think this backstory is fine but it doesn't give us that much information about the Chakram.
So let's break the back story by Chaosmark's own standards
1) "items of obvious utility do not require a backstory" I assert that this item has an obvious utlity. If you have a curse or disease then the means to cure those afflictions are immediately justified. But you are right this item isn't generic, it is unique Charkam. Why a Charkam? The silversmith was going to use this on a daughter she kept locked inside the house. Why note something a little more managable, like a needle? The back story does not justify the charkam.
2) "require some sort of explanation for where their abilities came from" We don't know where these abilities came from. It is possessed "by secret and forgotten magic" was it actually built by angel or is it because it was forged from a crucifix. We get a lot of vague hints but not answer. As I said this story is fine, if you are going to give vague hints then you don't as much back story. Also why did the abilities change, why does it return to the owners hand? Your own answer to this "Oh, those are the Sacred Chakram of the New Moon, blessed by the Moon Goddess herself! You must be holy warriors, to be graced with such a divine weapon." would be enough backstory I feel and provide as much relevant information as the above back story.
3) "also gives extra tidbits to add to a world." I would say this is the most enjoyable part of back story for me. And we do get some tibits about the world, but I felt they were pretty standard. We know that lycans are vunerable to silver, their bites or scratches recruit new lycans and they only show up once a month. All those facts come through in the write up but they are already genre standards. The isolated community also isn't much new nor is the mother protecting her child. There is a tribe of doppleganger that is looking for it to protect the power they have usurped; that is kind of cool.
4) Finally I'd like to add my own. In an RPG setting back story helps the players and GM to manipulate and understand the item. I think the two posts I referenced above do that wonderfully.
OmegaDraco, I don't mean to be too harsh on your post. I thought it was fine, it is a usuable item with a passable back story. But I think you could do everything here in 100 words.
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Chaosmark, the Mort de Arthur may have an orgin for the sword, I don't remember and I didn't check. I was just trying to bait you in. But I could talk about the Arthur legends all day. Perhaps having a sword that was forged by the old religion and seeking the holy grail helped to cement arthur as a bridge between the celtic world and the christian world. The history of the kings of britian was a christian work wasn't it? Did the really early poems define the source of his dagger, spear and sword as Avalon?
Then the canny thief arranges for a few of these to be given to the local constables and city guardsmen, ornamented in such a fashion as to pay homage to the order of law keepers. Then at night, the thief slips on his ring, rendering the guardsmen invisible to him, and him, invisible to them. (this would have to be a modified set, otherwise everyone would notice when the guards suddenly couldnt see each other)