Abercrombie the Embalmer creates Stitches as a "gift" for Lord Ello Ebonlocke, the mayor of Darkshire — sending him to terrorize the town. This will occur when you start the quest [10-30] The Embalmer's Revenge. It will now spawn outside a phased version of the town hall in which the Night Watch attacks him.
"Stitches was sad. Stitches want playtime. Stitches play too rough. No one play with Stitches. But Stitches found Nexus. In Nexus, everyone have to play with Stitches! So much playtime make Stitches... hungry."
Notes
Prior to patch 4.0.3, Stitches was spawned behind Abercrombie's shack, northeast of the Raven Hill Cemetery, after completing [30] Translation to Ello. Stitches would then patrol down the road through Duskwood to Darkshire. This triggered an event, spawning two sets of Night Watch guards to defend the road to Darkshire, one at the camp across from the Vul'Gol Ogre Mound, and another outside of The Rotting Orchard. Without player aid, Stitches would decimate both sets of guards, and continue to Darkshire. It was highly common for players to die to Stitches, due to him being an Elite Level 35 mob in an at the time Level 18-30 zone.
In addition to Stitches, the embalmer also created the Stitched Patroller <Another Gift from the Embalmer>.