That crazy plant, Scarlet, has bombed and gassed Lion's Arch. I can't begin to count the dead. I just know the wounded keep coming.
Miasma was a deadly gas released into Lion's Arch by the villainous sylvari Scarlet Briar during the Battle for Lion's Arch. It initially killed one out of every two patients afflicted with it, although the death rate dropped quickly after the end of the battle. Those afflicted with the miasma have described it as being like "scraped from the inside out", and survivors develop a lifelong lung condition that has come to be known as Scarlet's Rattle.
The miasma was first seen in its current form in the initial invasion of Lion's Arch, when it was deployed by Scarlet's Alliance ground forces and quickly enveloped the city, killing thousands of civilians and poisoning many more. Lionguard forces were able to enter the city to evacuate civilians only when miasma levels had subsided. Shortly after, the wind had changed and the miasma had largely dissipated, although it was still dangerous to go near the miasma canisters.
In fact, however, the miasma seems to have its origins going back a bit further, to the time of the Tower of Nightmares. The plant that formed the "trunk" of the Tower of Nightmares was grown by the Nightmare Court, and made toxic by the krait. An antitoxin was created by Marjory Delaqua, but the miasma was resistant to this antitoxin. It has been theorised that the purpose of the Tower of Nightmares was to create this stronger poison, that could wipe out an entire city.