Westcott was a London coroner and a serious Freemason and Rosicrucian, and he supplied the Golden Dawn with the one thing a new magical order most needs: a pedigree. In 1887 he decoded a set of Cipher Manuscripts that had reached him, by his account, from A. F. A. Woodford, and which outlined a graded ritual system. He then produced a correspondence with a German adept, Fraulein Anna Sprengel of a lodge called Licht, Liebe, Leben, who authorised him to found an English temple. The letters conveniently ceased in 1890 with the news of her death.
The scholarly consensus is that Sprengel never existed and that Westcott wrote the letters himself. Ellic Howe's documentary history and later work by R. A. Gilbert found no trace of the woman or the lodge, and Gilbert established that the Isis-Urania charter was signed only by Westcott, Mathers and Woodman, the three men who were supposedly being chartered. The German in the letters has also been judged poor for a native writer. The origin of the Cipher Manuscripts themselves is a separate and still unresolved question; they are not obviously Westcott's work, but they cannot be as old as was claimed, since they draw on an Egyptian funerary text untranslatable before the Rosetta Stone.
This is not a footnote to the order's history. Alison Butler's work traces Golden Dawn ritual to identifiable printed sources available in London libraries, which is to say that the most influential magical system of the modern West was assembled by well-read Victorians from books, and then given a fictional German lineage because a system assembled from books did not feel authoritative enough. The rituals worked on their initiates regardless. Whether that makes the forgery a venial sin or the central fact about the order is a question the tradition has never settled.
Westcott left the order in 1896 or 1897. The story usually told is that occult papers of his were lost in a hansom cab, traced back to him, and brought to the attention of his employers, forcing a choice between the coronership and the Golden Dawn. The professional conflict is real and documented; the cab is traditional anecdote and should not be repeated as established fact.