Aliss Demurrage, or Black Aliss as she was known (a nod to the name Black Annis, from English folklore), never appears in the books, being long dead, but she is a part of why Esme Weatherwax is the way she is. Aliss was an incredibly powerful Discworld witch. She knew all the tricks a witch should know, and had mastered the use of stories; Nanny Ogg said she could be running as many as three of them at once. Unfortunately, after a while she was unable to distinguish reality from her stories and started going mad—hence the name Black Aliss (although Granny Weatherwax and Nanny Ogg claim the name arose because she had black teeth and fingernails due to her love of sweets). She is the wicked witch mentioned in popular fairy tales such as Sleeping Beauty, and met her end when she was pushed into the oven of her gingerbread house (à la Hansel and Gretel). Black Aliss is the bad witch in most fairy tales.
Aliss trained Nanna Plumb, who trained Goody Heggety, who trained Nanny Gripes, who trained Granny Weatherwax. Esme is as powerful as Aliss was, if not more so, and is concerned constantly with keeping herself in check lest she ends up like Aliss.
While Granny Weatherwax is said to be stronger than Black Aliss, Aliss is unconstrained by right and wrong. This apparently means she could, in addition to simply being evil, extend her own life as well as interfere with the nature of causality, such as preventing swords from cutting her. (Granny did the same in Maskerade, but instead shifted the wound forward in time, and causing it to wait several weeks before she would receive it.)
A gingerbread house appeared in The Light Fantastic, whose owner had been shoved into her own oven; however, this was a different witch (Goodie Whitlow) who met the same end due to narrative causality.