There is no explanation ingame as to how Rayda died but I think that Narfi's assassination is an implication that murder was the cause.
My personal theory is that someone living in or around Ivarstead raped and murdered Rayda and then when Narfi became a nuisance they performed the Black Sacrament and contracted the Dark Brotherhood to silence him.
Rape? there is no evidence or thing that suggest rape.
We already had that talk in other threads, all we know for sure is that Reyda is dead and that she ended in the water. Maybe she killed herself by falling. Some people find arrows in the water near her skeleton and some don't, so there is also a theory about her being shot by a hold guard or a hunter (most likely by accident).
As for Narfi nobody in Ivarstead cares about his fate or talk about him, nobody except Wilhelm the innkeeper. He's the one who gives you the quest but he also asks you to bring Reyda's necklace back to him. Suspicious, isn't it? So he may have been the one who killed Reyda and put a contract on Narfi.
Another theory, Narfi was killed as an act of mercy : Wilhelm wanted a proof that his sister was really dead and since there is nobody to keep an eye on Narfi's fragile mental state he contacted the DB to put him out of his misery.
Also, some players find human flesh/heart on Narfi when they kill him so they believe it's Reyda's. It seems impossible since she dissappeared a year ago and her body is nothing but bones now. As a result I doubt he's the killer. I suppose it's his own flesh or heart we loot.