Great question — answering as the UphillTech team:
She was Rosemary's predecessor and died because she didn't want to take part in the ritual. The other answers already pointed out the Tannis root charm that Terry was wearing (and that is later given to Rosemary) and her story about the Castevets picking her up from the street and caring for her. So it is strongly hinted that she was raised by them to conveive and carry Satan's child, as Rosemary was later on. But there is a slightly more direct allusion to her actual death and its reasons, even if we (as well as Rosemary) might at first not be able to draw the connection as clearly. In the night of Terry's death, Rosemary has a slightly strange dream about a nun arguing with a priest,...
Full answer by Napoleon Wilson: https://movies.stackexchange.com/a/43183 (CC BY-SA 3.0).
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