Peter Jeffries's Count Grendel is the perfect, typical, mustache-twirling villain that a story as swashbuckling as this one needs. Jeffries is masterful in the role - just about as ideal a fit as you could ever get. Grendel is super super fun to watch in any scene that he's in, but it's his climactic sword fight with The Doctor and it's resolution that is the highlight of the story.
As good as Grendel is in the scene (and he is 100% playing the straight man to The Doctor's hi jinks), it's The Doctor's character that really comes to the fore before and during the fight. We've seen The Doctor ably participate in swordplay before, so it's easy to be initially baffled by The Doctor's amateur approach to fencing before fighting Grendel. But the scene serves as an example of the Fourth Doctor in a nutshell. This Doctor often uses humour and his eccentricity to deflect attention away from himself, but his behaviour is masking superior skills and intellect underneath. The sword fight does go on for some time, but that doesn't make it any less entertaining, and it contains the single best exit line of any villain in Doctor Who.
The Androids of Tara is a glorious example of everything that was great about the Graham Williams era - romanticism, fantasy, whimsy, and high production values. While not all Williams-era productions displayed all four of these qualities, Tara is a story that comes close, and is most likely my favourite of the whole Key to Time season.