For the second time in season 4, TNG decided to push the envelope on exactly what our dear, perfect, utopian Federation was really like. In "The Wounded", a well-meaning and well-regarded captain carried out a vigilante campaign of justice with horrific results. In "The Drumhead", a Starfleet Admiral carries out an unfounded witch hunt aboard the Enterprise.
This episode also mines a rich seam - Picard squaring off against his superiors. It would happen a few more times during the show's run - "Ensign Ro" and "The Pegasus" - with great results.
The episode starts off with a nod to Worf's arc (which would be resolved within a few episodes). The offscreen appearance of the Romulans suggests another military thriller. But the episode, in a nice headache, takes a wild turn into deeper waters.
We (and Picard) slowly realize what Admiral Satie is up to, with Worf as her willing pawn. The tale culminates in a superb climactic courtroom scene, and there is a wonderful, understated epilogue between Worf and Picard on the observation deck.
If I had to pick two MVPs for the episode, it would be Jeri Taylor (the episode's writer) and Patrick Stewart, who gives a tour de force performance. Honorable mentions go to Jean Simmons (Admiral Satie), Michael Dorn and the guy who played Simon Tarses. The latter gives a heartfelt, convincing performance as the crewman whose career is forever ruined by Satie's zeal.