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According to the local legends, Robin Redcap, along with his master, were responsible for all manner of depravity and devil-worshiping in the past and became so dangerous that the locals had to stage a rebellion of sorts against William de Soulis and boil the madman alive to stop his reign of terror.
As for Robin Redcap himself, the demon was said to have vanished shortly after the death of his master though its never truly known if such a being could ever truly be considered dead - perhaps he is simply waiting for a chance to return. (in some versions Robin can be seen infrequently, guarding a hidden treasure buried deep under the castle - which he amassed during his reign of terror) Robin Redcap is likely related to other roaming spirits in English mythology and may well be an alter-ego of said beings, indeed when his master died it is possible Robin Redcap simply took on another form and name, as was common for malicious "fairy folk".
Robin Redcap's infamy is sufficient that in same versions of the legend he is not just a goblin but an alter ego of the Devil himself.
Powers and Abilities
Robin Redcap was a powerful demon capable of granting his master varied powers, teaching Soulis numerous dark arts - the goblin is also said to have granted his master immunity to most weapons and even magic rope, meaning that it took lead and boiling alive to kill Soulis.
Even after Soulis death Robin Redcap is said to haunt Hermitage Castle and he may even be able to "aid" his master after death, since Soulis ghost is said to return every 7 years no doubt as part of Robin Redcap's doing.