The Temple of the Winds is a place between the worlds. It was created by the wizards of the old war, in an attempt to lock away dangerous forms of magic from the world. It is through meddling done by wizards of old in the Temple that Subtractive Magic was lost to the world and Emperor Jagang and Richard Rahl were born with their respective abilities. A wizard entering the temple will inherit all the knowledge of the people stored there, in much the same way that the spirits of former wielders of the Sword of Truth guide the current Seeker's hand in its use. Later, Jagang would have Sister Amelia unleash a plague from the Temple. The entry into the Temple by Amelia violated the Temple and caused a variety of other effects requiring that Richard come there to set it right.
When the great war was nearing its end, the New World wizards decided to lock away dangerous magic within the Temple of the Winds. A team was created to accomplish this. However, it soon became apparent that something had gone wrong with their efforts.
It would soon be discovered that the one hundred members of the Temple team had betrayed the New World and locked away Subtractive Magic in an attempt to rid the world of magic. These wizards would be sentenced to death by the New World's head prosecutor, Lothain.
Lothain himself then volunteered to enter the Temple and attempt to reverse the damage done by the Temple team. However, his meddling only caused more damage.
After realizing Lothain had betrayed them, Baraccus entered the Temple to see if he would be able to reverse the Temple team and Lothain's tampering. Baraccus would learn that Lothain had allowed the magic of the Dream Walker to seep out, so that a person born with the abilities it gave could continue the Old World's crusade to end magic.
Baraccus realized he was unable to reverse this damage, but instead created a balance. He allowed for some Subtractive Magic to seep out so that when a dream walker is born in future years, so would a war wizard. While in the Temple, Baraccus also wrote the book Secrets of a War Wizard's Power so that the person born with that particular gift would have aid in learning to deal with his powers.
Having learnt of the Temple, Jagang forces Sister Amelia to enter it; though to do so, she is forced to betray her oath to the Keeper of the underworld. Amelia leaves the Temple with a special book that she was able to use to unleash a terrible plague upon the world.
Many thousands were killed by the plague until Richard Rahl fulfilled the wishes of the spirits and was allowed to enter the Temple himself. Within the Temple, Richard was able to end the plague; though he was forced to contract the plague himself as a requirement for leaving imposed by his deceased biological father's spirit, Darken Rahl.
In Confessor Richard returns the Temple back to the world of life using the power of Orden. Whether or not this implies subtractive magic has been restored remains to be seen.