There is a fantasy story I read in 1990s that for some reason got stuck in my memory, but I can not remember the title or the author.
The Dark World, a short novel by Henry Kuttner, possibly in collaboration with his wife C. L. Moore; the authorship question is discussed on the Wikipedia page for The Dark World. Maybe you will recognize one of these covers. If you read it in the 1990s, it was most likely in The Startling Worlds of Henry Kuttner.
The story itself could have been written much earlier, maybe even in 1960-70s,
It was originally published in Startling Stories, Summer 1946, which is available at the Internet Archive. The reprint in Fantastic Story Magazine, Winter 1954 is also available at the Internet Archive.
it is likely by a prominent author.
Henry Kuttner, alias "Lewis Padgett" and many other pen names, was a very prominent author of horror, fantasy, and science fiction back in the day; see his SF-Encyclopedia and Wikipedia pages.
The action takes place on alternative Earth,
"Worlds coexistent in time and space—but separated by another dimension, the variant of probability. This is the world that might have been yours had something not happened, long ago. Originally the Dark World and the Earth-world were one, in space and time. Then a decision was made—a very vital decision, though I am not sure what it was. From that point the time-stream branched, and two variant worlds existed where there had been only one before.
which is ruled by a repressive council, whose members have strong magical powers.
"Ganelon can do much—when he remembers. The Coven has fallen upon evil days. Once we were thirteen. Once there were other Covens to join us in our Sabbats. Once we ruled this whole world, under Great Llyr. But Llyr is falling asleep now. He draws farther and farther away from his worshippers. By degrees the Dark World has fallen into savagery. And, of all the Covens, only we remain, a broken circle, dwelling close to Caer Llyr where the Great One sleeps beyond his Golden Window."
Of those I remember one is always wearing a hood because she can kill people just by being seen,
But if Edeyrn rode with the Coven guards, if ever she dropped the hood from her face, neither sword nor bullet could save the woodsmen!
another is a supernatural seductress (I think her name is Medea, but not sure).
Hair dark as midnight fell softly to her knees. Under level brows she flashed one glance at me, a glance that held question and a fierce determination. She was loveliness incarnate. Dark loveliness.
Lilith. Medea, witch of Colchis!
The council serves a mysterious superpowered being, a demigod almost. Its name is something like Llur, but this could be misremembered or misspelled. Llur revels in human sacrifices
"Sometimes I think that Llyr does not sleep at all," she said. "I think he is withdrawing, little by little, into some farther world, losing his interest in us whom he created. But he returns!" She laughed. "Yes, he returns when the sacrifices stand before his Window. And so long as he comes back, the Coven has power to force its will on the Dark World.
which send him into an ecstatic state shared by the narrator, who has a psychic connection to Llur, through which the council maintains its magical powers.
Llyr! The thought of him—of it—crystallized that decision in my mind. For somewhere in the murk of Ganelon's past there was a frightening link with Llyr. I knew they were trying to push me into that abyss of oneness with Llyr, and I sensed that even Ganelon feared that. I must pretend to be more ignorant than I really was until the thing grew clearer in my memory.
The council is tasked with rounding up sacrifices, and at the time of the story there is a rebellion underway against it.
From out of the dark woods, suddenly, startlingly, a trumpet-note rang upon the air. In the same instant there was a wild crashing in the underbrush, an outburst of shouts and cries, and the night was laced by the thin lightnings of unfamiliar gunfire. The road was suddenly thronging with green-clad figures who swarmed about the column of slaves ahead of us, grappling with the guards, closing in between us and the mindless victims at our forefront.
Llur was born a man, eons ago, before becoming what he is. It is revealed that the other (our) Earth went down the path of technology, not magic, and that the point of divergence was the birth of Llur.
"Listen. Put these legends out of your mind. That is Llyr's power, and the power of the Dark World. All is veiled in mystic symbols of terror. But behind the veil lies simple truth. Vampire, werewolf, upas-tree—they all are biological freaks, mutations run wild! And the first mutation was Llyr. His birth split the time-world into two, each spinning along its line of probability. He was a key factor in the temporal pattern of entropy.
"Listen again. At birth, Llyr was human. But his mind was not as the minds of others. He had certain natural powers, latent powers, which ordinarily would not have developed in the race for a million years. Because they did develop in him too soon, they were warped and distorted, and put to evil ends. In the future world of logic and science, his mental powers would have fitted. In the dark times of superstition, they did not fit too well. So he developed, with the science at his command and the mental strength he had, into a monster.
As the story progresses the narrator turns against Llur and uses his psychic connection to find his weakness, according to "law" every being must have one, even Llur. It turns out that the weapon, a crystal sword, is hidden under the very portal that the council uses to communicate with Llur.
Miraculously the weakness that had chained me was gone. Llyr's strength poured through me. I unsheathed my sword and ran past Matholch's body, ignoring Lorryn who stood motionless, staring down. I ran to the pedestal with its blue-litten pane.
I gripped the sword's blade and sent the heavy hilt crashing against the glass.
There was a tinkling of pizzicato notes, a singing of thin goblin laughter. The shards fell clashing at my feet.
At my feet also dropped a sword. A sword of crystal, nearly five feet long—pommel and guard and blade all of clearest glass.
It had been part of the window. For within the hollow pedestal was nothing at all. The sword had been part of the pane, so that my breaking the crystal had released the weapon from its camouflaged hiding-place.
Along the sleek blade blue light ran. Within the crystal blue fires burned wanly. I bent and picked up the sword. The hilt was warm and alive.
The Sword Called Llyr in my left hand, the sword with blade of steel in my right, I stood upright.
The story ends with the narrator slaying Llur after defeating other council members.
For one instant I saw through the Window. I saw something beyond space and time and dimension, a writhing, ravening chaos that bore down upon Medea and Edeyrn and a golden core of light that I knew for Llyr.
Once almost human, Llyr, at the end, bore no relation to anything remotely human.
The grinding millstones of Chaos crushed the three!
The thunder died.
Before me stood the altar of Llyr. But it held no Window, now. All four sides were of black, dead stone!