A fantasy version of the Klan, where it's "Grand Wizard" really is a mage, and a dangerous one at that. Instead of hating blacks most of all, they hate non humans most of all (although they are no friends of black people either and certainly don't let them join.)
Historicly, we have had plenty of rl groups like the Taliban and the Puritans who supressed anything which was in any way fun. What if there was some group that was the opposite? (which in time would cause problems of it's own for the civilians under their control.)
A demagogue imimates the warrior-king or military officer of a long past age-his followers have the uniforms and weapons of that past time and are a dangerous group.
One day a year is the Day of Turning where those on the bottom of the heap for the rest of the year get to live like Kings. Privates question Generals, the people get a say in running things and there is great merriment and gift giving.
It is dreadfully rude to carry a fishknife whilst talking to a Merman or Mermaid, as they think of them as we would think of thumbscrews or other torture devices.
You've probebly heard of the real Thomas Hopkins, Witchfinder-General, who hunted down and hanged suspected "witches". What if there was a world/realm where magic was normal, and it was the non-witches and non-wizards who were hunted down and hanged as inferior beings?
In the Middle Ages, and even up to the early twentieth century, most of Europe's executioners were related: the Sansons and Deiblers in France, the Pierrepoints in England, etc. The reason for this was that, it generally not being socially acceptable to, well, kill people, executioners and their children could, generally, only marry other executioners or their children.
The parallels with massively inbred, Hapsburg-style dynasties are obvious- imagine a rather clever but politically inept satirist noting this, and being sentenced by the latter to a meeting with the former; even worse, imagine a dynasty of deranged and deformed executioners- think Texas Chaisaw Massacre with government funding.