The Mysterious Book is a powerful spellbook with strange magic that serves as the (unexpected) main antagonist of the My Little Pony: Friendship Is Magic episode "Inspiration Manifestation".
The book in its natural appearance resembles a pair of stone slabs, with spikes on the front of the first slab which is also decorated with an encircled 8-pointed star on it. It is presumably extremely ancient and was sealed away in a secret section of the old library due to its immense power and malevolence.
"Inspiration Manifestation" might be the title of the book, though it could also be just one of the spells secreted within. When a unicorn reads the spell, evil magic escapes the book and possesses the unicorn. This magic gives the user the power to instantly create anything they imagine, but also corrupts the user, driving them to keep creating and altering things until they mold the whole world in their image. It also leads the user to compulsively protect the book, even though once the spell is read, they retain the power even if the book is no longer in their possession. The influence of the spell turns the user's magic green, regardless of its natural color, and the unicorn's eyes will also glow sickly green (much like the red glow conferred by the functionally similar Alicorn Amulet).
However, the enchantment has a weakness - if a friend of the user honestly tells them that they are causing harm, the victim of the book loses both its power and the compulsion it brings.
Spike found the book within the Old Castle's Library while looking for a spell that would allow Rarity to create a new travelling puppet theatre in time for a festival after the one she created originally proved unsatisfactory for the client. By accidentally pressing a hidden bookshelf switch, he revealed the book, sealed all alone in a secret section of the libary, and retrieved it even as the stairway leading to it collapsed behind him.
He brought the book to Rarity, who read the spell and gained the ability to bring any objects she desired to life or modify existing objects in accordance with her whims. While this allowed her to effortlessly create a new theatre for her client, she did not stop there. She proceeded to create new collections of dresses for the next 15 seasons and then started to modify Ponyville itself without anyone's knowledge (other than Spike's), making the dragonling promise that he wouldn't tell anyone about her work.
However, Spike eventually realized that Rarity's unwanted modifications had not been making Ponyville better at all, and that her aesthetic flair was ruining perfectly functional objects and everyone's life. Still, he dared not tell on her or criticize her, fearing that she would perceive him as a bad friend. He first attempted to steal the book from her without being noticed, and succeeded, but realized to his horror that it did not affect her newfound powers at all. Subsequently, he finally found the courage to face her and earnestly tell her that she was going too far, breaking the spell's hold over Rarity.