Lilith has been manipulating stories and has transformed one wolf's mind so that it's almost human. Except now the wolf is starving, torn between trying to be a wolf and trying to be human and finding it can't be either. Then Granny Weatherwax finds it and this happens:
"Hah," said Granny. "Yes. Of course. There's always got to be"—she spat the words—"a happy ending." A paw gripped her ankle. Granny Weatherwax looked down into the wolf's face. "Preeees," it growled. "Annn enndinggg? Noaaow?"
The woodcutter never understood why the wolf laid its head on the stump so readily. Or why the old woman, the one in whom anger roiled like pearl barley in a bubbling stew, insisted afterward that it be buried properly instead of skinned and thrown in the bushes. She had been very insistent about that. And that was the end of the Big Bad Wolf.
Baron Saturday gets his power, and his revenge. But zombies of the Disc come back to life because they have unfinished business, and Saturday's reason for coming back was to vanquish Lily. Once that's completed, he knows he'll return to earth. As Mrs. Gogol says, she and Saturday had twelve extra years together, and it was a good twelve years...but they could have had more, if it weren't for Lily. And Mrs. Gogol can't even tell Ella that they're related, so she's got no family left. Makes it a bittersweet ending, for her.
Chilling as the idea of Granny as a villain is, it's rather tragic to realize that she would have preferred to be a villain, but resigned herself to a life of being mistrusted, dreaded and exploited by country bumpkins. It explains a lot about her... attitude.