Comlink-X:
You’ve answered your own question. Cedric Diggory was murdered on the orders of Lord Voldemort, and therefore ‘by’ refers to his instigating the action. Perhaps the strictly literal meaning causes confusion, but in common usage, i.e. informal dialogue, this is a commonplace manner of speaking. Were a political killing carried out on the orders of, say, Vladimir Putin, you would say the victim was killed by Putin, even if he didn’t actually pull the trigger.