Loki's Thor: The Dark World Death Was Originally Permanent

Tom Hiddleston has revealed Loki's fakeout death in Thor: The Dark World was originally written as the end of the character. Loki quickly became a fan favorite following his appearance in the original Thor, thanks to Hiddleston's charismatic turn and the fact he was a villain with a sympathetic backstory. The character became the main antagonist of The Avengers and was given something of a redemptive arc in Thor: The Dark World.

Thor: The Dark World is often considered one of the MCU's weaker efforts due to the underwhelming villains and the forced humor. The film underwent extensive reshoots too, and director Alan Taylor has since revealed The Dark World turned into a different movie during post-production. One of the bright spots of the sequel involves Thor and Loki being forced to work together, and Loki seemingly sacrificing himself for the greater good. However, the ending reveals it was all another trick, and the character has replaced his father Odin on Asgard's throne.

Loki's 'death' in Thor: The Dark World is played completely straight when it happens with no hint of the character pulling a trick, and Hiddleston revealed to Empire that that's because it was supposed to be the end for the character:

Loki's death on Svartalfheim was written as a death, and I would say Chris and I played that scene for real. That was meant to be that he redeemed himself, he helped save his brother, he helped save Jane Foster but that he, in the process, sacrificed himself.

Plans changed when test audiences refused to buy the character's demise:

It was part of the original pitch and in test screenings, the audience didn't accept it. They said, you know 'He's obviously coming back. That didn't really happen.' And there was a very strange and almost unanimous resistance to it. They decided that wasn't the end.

In reshoots it was decided to add the end scene revealing Loki played a trick on Thor, and that he finally got his wish to sit on the throne:

I think the genius of what they do at Marvel is something unlocked itself for the producers, for Kevin, for Alan Taylor and for the writers, which was what if it wasn't real, and maybe it was another shapeshifting, mercurial trick on Loki's part, and he's actually pulled the wool over everyone's eyes, including Thor. And at the very, very end of the film, the animus he's had for 3 films which is that he wanted to be Thor's equal, he wanted to be accepted by Odin as an equal, he ends up on the throne. It's such a great twist and the reason it works is that I didn't even know it was a twist!

It makes sense Loki's original arc for Thor: The Dark World involved the character dying in a heroic sacrifice since it would be hard to completely redeem him following his actions in The Avengers. That said, audiences love the character regardless and given his fondness for trickery and deceiving people, the final reveal of the movie makes total sense. It also allowed the character to continue on to Thor: Ragnarok and Avengers: Infinity War.

Hiddleston also admitted during the interview there were a lot of reshoots on Thor: The Dark World to lighten up the original, darker tone. For a long time, Loki was seen as easily the best villain in the MCU, though recent films have shown the studio has gotten better at crafting more interesting bad guys. The Vulture in Spider-Man: Homecoming, Killmonger in Black Panther and Thanos in Infinity War were all great antagonists, and had more nuanced plans than just trying to destroy/take over the world.