Character Analysis
We know from the first chapter of Howl's Moving Castle that the Witch of the Waste is going to be the Big Bad of this novel. We only get about seven paragraphs in when the narrator announces that, "It was said the Witch had threatened the life of the King's daughter […] And it seemed that the Wizard Suliman had not only failed to deal with the Witch: he had got himself killed by her" (1.7).
Obviously the Witch is a dangerous lady. Anyone who will personally visit an ordinary hat shop to turn a perfectly harmless, magically talented young woman into an old lady just because she doesn't "care for [her] competition or [her] attitude" (2.50) is clearly a vengeful crazy person. When we find out that Howl actually dated this crazy lady for a while before dumping her, we believe even more strongly that Howl is a self-destructive idiot when it comes to ladies (that is, until he finds his One True Love in Sophie Hatter).
Why So Evil?
There are two things that we find striking about the Witch of the Waste's characterization. First of all, the whole source of her evil behavior is clearly that she is enormously, stupidly, wickedly self-absorbed. She's so lonely and isolated that she seems to think the entire world resolves around her, as though she is the only real person left in her world. So when she wants to find true love she resolves to get it by taking apart Prince Justin, the Wizard Suliman, and Howl to assemble the perfect man out of their parts.
Perhaps our best direct evidence of the Witch's cruel self-absorption comes from her run-in with Sophie right after she has murdered Mrs. Pentstemmon in Kingsbury. The Witch is delighted to see that her victim is still old, and explains that she cursed Sophie for keeping her from certain information—even though Sophie "had no idea" (13.61) she was doing anything of the kind.
The fact that Sophie had no idea that she was interfering with the Witch at all, but the Witch cursed her anyway and then laughed about it "as if that was the funniest part" (13.61), indicates that the Witch has no sympathy or concern for other people left in her. While both Howl and the Witch may have contracts with their fire demons, Howl's soft heart shows that he can be saved, while the Witch's moral compass seems permanently set to evil.
Flashy But No Substance
While the Witch may be the most attention-getting Big Bad in the novel, we find out by the end of the book that she is actually quite frail in spite of her careful appearance and her total lack of any kind of moral standard.
When Sophie arrives at the Witch's fortress with her walking stick, the Witch makes the weak protest that, "when I bring you here, you wave your stick and argue. I have worked very hard for this moment, and I am not to be argued with" (21.30). At that moment, the Witch seems really disconnected from anything that is going on around her, as though the only thing she can really see any longer is what she wants.
When Howl and the scarecrow arrive to destroy the Witch with their magic, it actually doesn't take much. She collapses into a pile of bone with one strong blow. It turns out that the Witch has basically been eaten up by her fire demon, and her heart has been almost totally consumed. So her disconnected, violent behavior and her total lack of morality don't really belong to her as a person—they are the result of the fact that her fire demon has "had the upper hand of her for a long time now" (21.37). The real villain behind the Witch is actually—drumroll please—Miss Angorian.