From the DS9 Companion, via Memory Alpha (not word for word)
The basic story of this episode came from David Weddle who had been an investigative reporter and had written about cults for the L.A. Weekly and San Jose Mercury News. According to Weddle, "I've always been fascinated with cults. I'm interested in that hunger to find something to believe in that's bigger than the viewable reality. The desire to find heaven on Earth often ends up leading people down a very twisted, paranoid road. Fundamental human longing can be twisted by a cult leader, because he can never deliver on his promises of bringing about a golden utopia. Then he has to come up with reason why, and it's always that there's a conspiracy out there, that something or someone is conspiring against the group. That's when paranoia gradually overshadows the whole thing. Vedek Fala is a good example of a typical follower. He's someone who desperately wants to believe. When you study cults, you find a lot of people who were brought up in traditional religions and who had a strong faith when they were young. But they became disillusioned with that faith when they saw hypocrisy. They cast aside the faith they were brought up with, but they still have the need. The hunger is still there. At the end, when Dukat turns out to be a total charlatan, Fala can't handle it. He would rather die still trying to grip the illusion than go on living."
Specifically, the episode was inspired by the Heaven's Gate cult led by Marshall Applewhite The cult was inspired by the Comet Hale-Bopp, and in March of 1997 Applewhite and thirty-eight other members (including the brother of Nichelle Nichols committed suicide, believing they were aliens and that their bodies would be transported to a space ship traveling behind the comet.