The Toclafane were Human-based cyborgs, integrated into a spherical, mechanical shell. Originally the name Tocalfane were fairy tale monsters from Gallifrey, their name, like the Bogeymen on Earth, just made up.
Biology
The Toclafane were cyborgs, the faces of Humans intergrated into metal spheres that are sealed shut, making themselves "pretty". They became a hive mind, making themselves almost invincible, as well as evil and child-like in their personality. They are childlike because they tried degressing themselves into chidlren.
The spheres could hover through the atmosphere and even fly through space, undamaged. Concealed within the sphere are spikes and blades that can extend. A Toclafane can use them to slice up a Human being. The spheres are also equipped with a laser that can turn Humans into ash. The spheres can be shot down by an electrical surge of 510 megajoules precisely, however, this is most unlikely because this power exists in lightning bolts, and the odds of one bolt striking a Toclafane are slim.
History
The last of Humanity, scattered across the darkness of space, recieved a message that said "Come to Utopia", and being that the Utopia Project was set up to find a way to survive the end of the universe, everyone believed they found a way. Humans traveled to the planet Utopia, finding it dark, cold, and inhospitable. To survive, the Human-race evolved into the Toclafane, their final evolution.
The Master, using the Doctor's TARDIS, traveled to Utopia in the year 100,000,000,000,000 where he met them. As Prime Minister of Great Britain, the Master announced that he had made contact with a race of friendly aliens. The Toclafane had tractable, child-like personalities and trusted the Master. The Master had, by this time, converted the TARDIS into a paradox machine, allowing the six billion Toclafane to invade Earth in their own past and change their own past history. With the Toclafane, the Master built the beginnings of a new Time Lord Empire.
The Toclafane invasion was a success. They subjugated Humanity and forced them to build a fleet of 200,000 rockets to take over the rest of the Universe. The Toclafane were able to kill their ancestors without cancelling themselves out due to the paradox machine keeping the paradox in place. Their plans were thwarted one year after the invasion by Jack Harkness, who destroyed the paradox machine, forcing the Toclafane back to the end of the universe. The Master's reign of terror was ended when this happened and time was reversed. (DW: The Sound of Drums / Last of the Time Lords)
Behind the Scenes
The Toclafane were based on V.I.N.CENT from the Walt Disney film The Black Hole, who looks a bit similar but has a much more friendly personality.