King Leoric, reanimated.
The Crown of the Skeleton King is a quest item required for the required in order to complete The Skeleton King quest.
This quest was seen in the Blizzcon 2008 demo. In that version of the game, the crown was obtained on the second level of the dungeon from the leader of a group of Dark Cultists. After securing the crown, players had to venture down to the third level of the dungeon and fight their way through to Leoric's throneroom, where the ancient King's moldering bones were perched on a throne.
Dropping the Crown on them caused King Leoric to reanimate, triggering the final boss battle that concluded the Blizzcon 2008 demo.
The crown has a name that is green in color, but this is not a Set Item.
Video
Leoric's reanimation and the subsequent battle can be seen from just after the Crown was used to awaken him, in the following YouTube video.