Melkor’s inability to perform true creation is tied to the idea that something of his actual being must pass into the things he “created”, in order to give them an effective substance and reality. Melkor could not create anything, as he did not possess the Flame Imperishable; thus he could only create a mockery of those things in Arda. From his Trolls to the Sun (which was made from a flower from a Tree poisoned by Ungoliant, and was thus itself imperfect), Melkor’s power and essence was poured into Arda. Melkor’s individual self was diminished as a consequence. He was reduced to Morgoth, the “Dark Enemy” (poetically elaborated as “The Black Foe of the World”).
Morgoth, once the most powerful being in Eä, spent his will on his vast armies and followers, so that in the War of Wrath, as his armies were swept away before the host of Aman, he was captured by Eönwë and cast off his throne. Morgoth’s spirit was cast out beyond the Walls of Night, yet his presence remains as the pervasive corruption of the world.