As its name suggests, the main application of teratogenesis is in creating monsters. Most of the monstrous denizens of the Locus were at some point or another spawned through magic. In addition, many of its more exotic domesticated animals were created the same way. This is how pseudarthropoids came into being, for instance.
The most intelligent group of magical creatures in the Locus are known as the morphed races. These were created from human stock by the ancient Irsidu civilization. Of the morphed races, only the nagas (half-serpents) retained the ability to shapeshift; to this day they still call themselves Irsidu after the civilization that spawned them.