How to defeat the Lich?

It seems impossible to defeat the Lich! Is there a way to defeat it? Should I start with the skeletons and then go for him?

It seems that it raises the skeletons back to life... so what should I do?

I find that the best way to deal with the Lich is to sit back and smash its skeletons and then reflect the magic missiles. It takes a little longer, but the vortex of fire that is left whenever it teleports is difficult to dodge and makes getting up close for melee damage risky unless you have particularly good equipment/blessings and have plenty of health in reserve.

Also, if you can, try to obtain a weapon that does holy damage prior to engaging the Lich. Holy weapons deal bonus damage to the undead, and may cause them to be unable to be resurrected.

Trent Hawkins is right that you should kill the skeletons first, and that a holy weapon helps.

If you fight the skeletons on the other side of the large block in the middle, the Lich won't even really bother you.

Once you've done that, here's some extra detail on actually fighting the Lich:

Slowly move toward the Lich, but don't get too close until you've deflected a fireball. If it sticks around, go ahead and melee it once. Often when it teleports, it ends up close enough to you that you can melee it once before it starts shooting bolts at you again. If it's farther away, just move up until you're in good range to deflect a bolt, and repeat.

At this point it's pretty easy to avoid getting hit and kill the Lich with one melee at a time. I've had 3 health left when I killed the skeletons, and took no more damage.

If you're having trouble, the Arrow Cutter equipment will block the bolts.