In the early days of the earth, life was in chaos. The children of the gods milled about on the face of the earth, living and dying, but to no purpose. In the original design of the earth, mortal existence was to proceed in an orderly fashion, with well established rules for virtuous behavior and consistent rewards and punishments for following or straying from the paths of righteousness.
The flaw at the center of the earth shot all of these plans to hell. Mordak Deathforge, Lord of the Dead, had all he could do just to process the souls passing through the Underworld, let alone sort out who had been naughty and who had been nice. It was time to bring in outside help.
So Mordak advertised among the celestial spirits for a judge of souls, someone to keep on top of the ever increasing religious codes and hand out the just desserts so that mortals would see the benefits of toeing the virtuous line. Well, there were applicants beyond number--imps, sprites, demons with degrees in Comparative Religion and Analytic Philosophy, learned spirits of all degrees. Mordak interviewed them all, posing detailed and largely unimportant hypotheticals in judging degrees of virtue and vice. At the end of each interview, he would lean over his desk and fix them with his cold gaze, and each and every one flinched because he was a feared and hated god.
All except one. She was a small, quiet house spirit, of the kind that quickly and efficiently accomplishes the many practical things necessary to make the dwelling of a god tick. She answered all the unimportant questions with good sense but no great learning. Yet, at the end of the interview, when Mordak fixed her with his fearsome gaze, she gazed calmly back at him and smiled a gentle smile.
"WHY DO YOU NOT FEAR ME?" Mordak asked.
"Because at heart, I can see that you are a just god," she said simply.
"YOU'VE GOT THE JOB," Mordak replied.
And so she was named Karma, the Great Wheel, and given the job of judging the living and the dead, seeing to it that enough virtue is rewarded in the world, and enough vice punished, that mortals (and gods) will on average follow the path of righteousness, and the world will progress to its ultimate destiny.