In The Elder Scrolls there is a phenomenon known as "Mantling", which Is basically if you take the place and act as a God, you become that god.Īfter the CoC took the place of Sheograth, and Defeated Jyggalag, Jyggalag could not turn back into Sheogorath, as the CoC had taken up that role. To sum up how he was released, By having the CoC take up the Symbol of Office "Sheogoraths Staff" and take the Throne of Madness after he was morphed into Jyggalag, the CoC in all reality BECAME Sheogorath. The curse would momentarily break during the "Grey March", where Sheogorath would return to being Jyggalag and destroy the Shivering Isles (Madness and Order are pretty much enemies after all), but after its destruction he wouild return to being Sheogorath who would then rebuild the Shivering Isles.
He was Trapped because, all the Other Daedric Princes were said to "Fear his power", so they cursed Jyggalag "Prince of Order" into becoming Sheogorath "Prince of Madness".