Summary
ThroughoutElden Ring,there are plenty of areas with innate power. Crumbling castles and churches, the classic soulsborne poison swamps, and even huge mountains where the last of the giants dwell.
The Realm Of Shadow is no different from the Lands Between in this regard. But, as you travel among the gravestones and crypts, one thing is always constant: the giant Scadutree looming overhead. But, what is this large, ominous tree doing in the Land Of Shadow?

Spoilers for Elden Ring’s main plot, and Shadow Of The Erdtree follow.
The Land Of Shadow
To understand the Scadutree, you should first understand where it has taken root.The Realm Of Shadowis in many ways the inverse of The Lands Between.
The place surrounding the Scadutree is interchangeably called The Realm Of Shadow or The Land Of Shadow.

It seems to have once been a part of The Lands Between. This isbacked up not only by the map sectionsof both fitting together nearly perfectly, butalso by some of the lore concerning Marika and her son Messmer.
A Place Far Removed
The Land Of Shadow seems to be somewhere thatMarika herself has sealed awayfrom the rest of the world.There are multiple reasons for this. For one,it is the place where the Hornsent call home, the people that once fought against Marika and her people when she was mortal.
This leads to the hatred of the Omens by the Golden Order, as the Hornsent and Omen seem to be connected.

It is also the place where she has banished her son, Messmer, due to her being afraid of his powers: both his flame and the Abyssal Serpent inside him. This works out, ashe can then stay in The Land Of Shadow and persecute the Hornsentin her name.
It also hides Marika’s village, a place that she probably didn’t want people venturing to after her ascension to godhood. Something thatMiquella is keen on pursuingfor their own attempt at godliness.

But What About The Scadutree Itself?
“All manners of death wash up here, only to be suppressed.” -Suppressing Pillar.
Since the Lands of Shadow were removed from the rest of the mortal world,it has become the place where the dead all end up, thus all the gravestones and mausoleums. An inverse of the mortal plane,it now mimics The Lands Between, which is seemingly why the Scadutree has appeared.
Scadutree has an Old English spelling, making the appropriate pronunciation ‘shadutree,’ or shadowtree. This is similar to the Old English spelling of gaol, the pronunciation of which being ‘jaol’ or jail.
The Scadutree itself isn’t really mentioned directly in the base game or in the Shadow Of The Erdtree DLC. But, if you look at the map,the Scadutree is in the direct spot where the Erdtree is rooted in Leyndell Royal Capital.
This adds to the idea thatThe Realm of Shadow is the Elden Ring equivalent of the afterlife. It also connects to the power of the Erdtree’s great runes. It would make sense since so many people follow the Erdtree that it would have an equivalent for them to look to after death.
A Dark Reflection
Thismakes the Scadutree the literal ‘shadow of the Erdtree,‘which makes sense as a giant tree that has become deific and exists in multiple realms. It also works as a poignant set piece that looms over the player, with a dark, ethereal shadow draped from its branches but some light emanating from its sap.
Messmer references the light of the Erdtree, or your tarnished’s lack of connection to such, in his opening dialogue.
It works in many of the same ways that the Erdtree doesin The Lands Between. Many of the NPC spirits you see throughout the game look into the distance at it reverently,it has inherent power in its realm(thusthe Scadutree Fragmentsthat give you power there and only there),and it has its own avatar to protect it.
This echoes back through the main game, not only showing how powerful Marika and the Erdtree are, but also how much people like Miquella seek power. Even creating elaborate plots to try and reach an equivalent status.