In the late 1970s, two young British occultists, Ray Sherwin and Peter Carroll, with a strong interest in ceremonial magic, began to publish a magazine called The New Equinox. Both were connected with a burgeoning occult scene developing around a metaphysical bookstore in London's East End called The Phoenix. The story goes that both men became quickly dissatisfied with the state of the Magical Arts and the deficiencies they saw in the available occult groups. So in 1978 they published a small announcement in their magazine proclaiming the creation of a new kind of magical order, one based on a hierarchy of ability rather than invitation, a magical meritocracy. It was to incorporate elements of Thelema, Zos Kia Cultus, shamanism, tantra and Taoism. They called their creation the Illuminates of Thanateros (IOT), enshrining the dualism of the gods of Death (Thanatos) and Sex (Eros).
Carroll and Sherwin began to publish private monographs detailing their system of magical practice, some which had been articles in The New Equinox, others which were intended as instruction to members of their order. In the 1980s they began to attract a following in England and Germany, including some influential occult writers and practitioners. But before the decade was out, Sherwin would resign in protest that the IOT was beginning to resemble the hierarchical orders that were once anathema to the concept of the group.
Carroll carried on, and subsequently published the IOT's instructional documents in a book titled Liber Null & Psychonaut, followed by Liber Kaos, and the IOT became known to occultists around the world. Carroll would later, following ideas of Ralph Tegtmeier, refine the direction of the IOT as a "real" magical order and manifest it as The Pact of the IOT, or simply The Pact. The Pact organizes itself along the somewhat "traditional" lines of a fraternal occult order, with initiations into progressive degrees denoting magickal skill and leadership within the group. It consists mostly of small, semi-autonomous Temples arranged into geographical Sections, i.e. Europe, the Americas, etc. Unlike such groups as the O.T.O. or various offshoots of the Hermetic Order of the Golden Dawn, The Pact is an informal confederation of like-minded practitioners, rather than a legal entity or non-profit corporation.
However, in the early to mid-1990s this Chaos Magic Order began to behave chaotically, and several schisms among the leadership broke the group into factions such as the Reformed IOT (RIOT) in Germany and The AutonomatriX in California. Eventually even Carroll disassociated himself from the group and retired from active participation, explicitly stating this was not a consequence of disagreement with the state of the Pact but a matter of his personal development.
In recent years the Pact of the IOT has toned down its rhetoric and acquired a less outspoken leadership. The Pact still exists as of this writing, as does the AutonomatriX and other various spin-off groups, not including RIOT.