The Library in Derceto can be accessed via the Gallery on the 2nd Floor. The unlocked entrance to the Library consists of double doors located near the center of the Gallery hall. The other set of double doors leading to the Library can be found in the Lobby. These doors become locked when first entering the Lobby, and can only be open from the inside, however.
Upon entering, the room is dark, requiring the use of the Oil Lamp to continue. This part of the house was the location of a unique enemy in the game known as the Vagabond, a ghost like entity that tries to attack the main character.
As referenced in Jeremy's Notebook, the Library contains a wealth of knowledge involving the Dark Arts and Cthulhu. Exclusive to the Library is access to a secret chamber somewhere on the far left shelf where some occult items can be found. To enter the chamber, place the False Book from the nearby bedroom into the empty space on that aforementioned wall (using Open/Search on the area will reveal precisely where the mechanism to trigger is found).
Two books in the Library (De Vermis Mysteriis and Fragments from the Book of Abdul) are dangerous to read if the reader is not standing under the pentagram to prevent the spirits within the books from killing them. It is recommended to read all Library books under the pentagram. In order to kill the Vagabond, the player must quickly find and open the secret passage and choose the right dagger there to kill the Vagabond (the golden dagger with the twisted blade). Fortunately just one stab is enough to kill the Vagabond, being invincible to any other weapon otherwise.
Note: If you are having a tough time searching the Library bookshelves in the dark, due to the Oil Lamp not being active while the search function is on, you can drop the lit lamp and the room will still remain lit until you pick it back up.