TIY's sketch of Cthulhu.

Cthulhu is a fictional cosmic entity originally devised by author H. P. Lovecraft, as an evil god from beyond the human universe. The creature remains a popular element of Lovecraftian horror today.

Cthulhu was a possible boss. Re-Logic was considering its addition at one point, but he was replaced by Moon Lord. While Cthulhu itself never made an appearance in Terraria, a number of enemies and items include direct and indirect references to Cthulhu.

official game lore, before the events of the game, Cthulhu did exist in the world and almost destroyed it, before an ancient race of Dryads defeated him at the cost of almost their entire race. Cthulhu was not killed, but was crippled when a few organs were ripped from him. After that, he retreats to the Moon and plans for another attack. (Which contributes to proving his relevancy with Moon Lord.) The Lunatic Cultist plans on restoring Cthulhu and has forced the Mechanic to forge mechanical organs of Cthulhu. However, since she has never completed the mechanical brain, the restored Cthulhu cannot function, and thus, he never appeared again.

official game lore, before the events of the game, Cthulhu did exist in the world and almost destroyed it, before an ancient race of Dryads defeated him at the cost of almost their entire race. Cthulhu was not killed, but was crippled when a few organs were ripped from him. After that, he retreats to the Moon and plans for another attack. (Which contributes to proving his relevancy with Moon Lord.)