Prior to the council, the City-state of Karn was ruled by a single leader, the dictator Thoradin Karn.
After our heroes removed him during The End of Karn, they created a council to rule the city instead. There are 11 seats including a head of the council, (originally) all of our heroes, representatives from various aspects of life in Karn, and (due to Cendis' deal with Berroven) an appointed seat by an Ice Devil.
The representative seats are voted on by the citizens of Karn. If anyone leaves the council, the remaining council will vote as to who should replace that person or seat (until another election occurs)
to represent the commonfolk's interests
to represent businesses and their interestes
to represent the old rebellion members
to represent the interests of all religions that can now practice in Karn
to satisfy the agreement that was made with Berroven