Conrad's death is significant both in its contribution to plot development and also to character delineation.
Conrad, son and heir of Manfred, dies when he is mysteriously crushed by a gigantic stone helmet. He does not really appear as a character in the novel but is very important and his death has a direct influence on the major actions in the novel.
Conrad is supposed to marry Isabella, daughter of Frederic. Frederic is, in actual fact, the real heir to the Castle of Otranto. Manfred arranges the marriage between Conrad and Isabella in order to unite the two factions claiming rights to Otranto. Conrad's death puts paid to Manfred's attempt to consolidate his own position through his son. Thus, he turns his attention to other means to attain his goal. This sets into motion a chain of events which culminate in his downfall and the restoration of the Castle of Otranto to Theodore who is declared as the true heir of the castle. The prophecy that the castle will be restored to its rightful heir "whenever the owner should be grown too large to inhabit it" is thus fulfilled.
Isabella's repugnance at the idea of her marrying Manfred, after his proposed divorce of his wife, Hippolita, leads her to run away from the castle to the church of St. Nicholas, to seek the protection of Friar Jerome. This action is in itself significant since it brings the holy father into direct conflict with Manfred. This advances the plot as it creates the occasion for the Manfred to sin further by challenging the spiritual powers.
Conrad's death also introduces Theodore into the action of the novel. Theodore's explanation on discovery of the dead Conrad generates a conflict between him and Manfred. Theodore's affiance with Isabella complicates the novel's plot further. Manfred mistakenly believes that the two are in love much to his annoyance as he regards it as an affront to his authority. The stage is therefore set for the final confrontation in the novel which results in Manfred's downfall and the return of the Castle of Otranto to its rightful heir.
Conrad's death also contributes to the delineation of Manfred's character. It exposes Manfred's depravity and his capacity for evil machinations. Conrad's death leaves him with only one option as he sees it to consolidate his hold on the castle. When his attempt to obtain Isabella's consent to marry him by manipulation and subterfuge fails, he resorts to violence. His lechery and unscrupulousness are accentuated by Conrad's removal from the scene, and he is exposed for what he really is. With the introduction of Theodore immediately after Conrad's death, a formidable opponent to Manfred's evil plans emerges.