Magdalena was a power-hungry courtesan who became Nostro's wife, setting up the downfall of Nostro and diluting his achievements for Albion.
Years after the fall of the Old Kingdom, the bandit Nostro founded the Heroes' Guild and forced a peace on the warring peoples of Albion in an attempt to return the continent to it's former glory. It was during this time that Nostro met Magdalena, who began to corrupt Nostro. Eventually, her influence corrupted Nostro to the point that The Arena, once a venue to settle disputes in public, was debased into a source of popular entertainment. In addition, her influence saw the once-mighty Heroes became mere greedy mercenaries in search of fame and profit. These developments shattered the Guild, destroyed Nostro's vision, and disgusted Scythe, Nostro's mentor, who left his old pupil to his fate at the hands of an assassin.
It is quoted in the Tales of Albion that after Nostro's death, Magdalena went on to wed a series of husbands. Her children used their mother's connection with Nostro to establish hereditary power for themselves over Bowerstone. This could mean that Lady Grey is a descendant of Magdalena due to the fact that she was also a wicked woman with hereditary control over Bowerstone in Fable and The Lost Chapters.