The first part consists almost entirely of building up the atmosphere of fear that pervades the story. After a brief glimpse of a "fireball" in the sky, everything else consists of a heavy fog rolling in out of nowhere and an effort to work out what actually killed Ben, one of the three lighthouse keepers stationed on Fang Rock in the early 20th century (judging from the newfangled electricity and comments in part two about when the Beast of Fang Rock appeared previously). There's a feeling of dread that always present, as the Doctor tries to figure out what's happening, while the audience knows (thanks to some first-person shots) that some sort of alien is also on Fang Rock.
Interestingly, the first cliffhanger involves a ship breaking up on the rocks, which means that part two introduces four more characters into the mix: two politicians, a secretary, and a crewman from the doomed ship. The younger politician, Lord Palmerdale, is desperate to get to London before daybreak for financial reasons, which means he couldn't care less about the problems of anyone else -- all he wants is money and (it seems) the chance to ruin the older politician, Skinsale.
Of course, while these new arrivals are bickering, the alien is still roaming the island. The Doctor and Leela (dressed in a Barbara Wright-esque outfit this time around) are trying to track the thing down, while Reuben (the elder keeper) tells them about the Beast of Fang Rock. The Doctor knows that, while there's no such thing as the Beast of Fang Rock, nevertheless something is out there that wants in -- it's already killed Ben and performed a post mortem on him, and the Doctor believes the people in the lighthouse are next. "Gentlemen, I've got news for you," the Doctor tells the shipwreck survivors happily. "This lighthouse is under attack, and by morning we might all be dead. Anyone interested?" he adds with a grin. It's a decidedly odd choice, but that's what makes it so brilliant, as it establishes the Doctor as being just as alien as the thing outside.
And then, in another interesting cliffhanger, Reuben goes down to stoke the boilers, and then we cut to Skinsale and Palmerdale's secretary, Adelaide, as they hear a blood-curdling scream from below...
100 This was a take on vampire stories, but the BBC had a high-profile adaptation of Dracula coming out around the same time and didn't want Doctor Who to upstage/satirize that, so The Witch Lords was scrapped -- at least until 1980, when they made it as State of Decay.