Two Worlds Pacifist Run - Concerning Necromancers

Here we provide a more dubious side feature on pacifist challenge options when dealing with the many necromancers you'll find throughout the realm in Two Worlds I. The skill of necromancy tends not to feature very prominently as a preferred tool in most pacifist run RPGs for obvious reasons, and Two Worlds isn't an exception. However, the Two Worlds necromancers themselves are a decidedly mixed bunch of characters: At least a few necromancers you'll meet are cooking up some sinister scheme to slay throngs of people as part of their antinomian quest for enlightenment. Others, however, will offer you quests that fall into a much lighter "shade of grey," and won't require you to harm anyone at all to cash in on some more nonviolent yields of gold and experience points, as well as increased reputation with the necromancers in general.
Of course, even the best of necromancers aren't ideal allies for people who want to avoid involvement with questionable practices, and more than enough nonviolent experience is available if you prefer to skip dealing with them entirely. (In retrospect, there were also only a few necromancer quests that rewarded us with experience points, but we still found the encounters and dialogue entertaining.)

Nonetheless, with those caveats aside:

Starting on a practical note: One of the necromancers you'll find early on is just a skill trainer you can find fairly early on in the modest woodcutting and hunting village of Rovant, a distance over the mountain roads southwest of Covengor. He doesn't give a quest, but can teach you the powerful skill of Alchemy, and is probably the earliest trainer you can find for that particular skill. (He can also teach you necromancy and iron skin, though those particular skills were never a top choice in our pacifist challenge runs.) Note that you don't have to do anything involving Necromancy to learn the Alchemy skill from this individual: You'll just have to pay him for training you.
Rovant village alchemy trainer (who also happens to be a necromancer)

Along the roads east of Komorin village you may notice a slightly intimidating two-story house on top of a hill (north of a junction in the lower road near a teleport): This belongs to Basil Tylar, a necromancer who will tell you he has need of a "bold man" who can perform tasks for him, and preferably who doesn't ask too many questions...
Further conversation will reveal that he wants you to retrieve a rope that has been used to hang someone. If you accept this charge, you'll get the quests "The Hangman's Rope" and "Gallow's Hill," which won't involve any violence despite being decidedly dubious tasks: All you'll have to do is go visit the macabre hilltop site of Gallows Hill, where (as the necromancer suggests) many Grom raiders have recently been hung.

You'll have to evade some wolves (including one necromantic dire wolf), but otherwise will be able to just grab a rope on top of the hill when you arrive, along with some taint shoots that grow there, and return the rope to the necromancer for gold, experience, and increased reputation with the necromancers.
As you may have already guessed, Basil Tylar doesn't have wholly benign applications in mind for the use of the rope in his rites, but he won't ever actually do anything that harms anyone unless you also perform his second quest to test out his experiments:
You can consequently opt to bring him the rope secure in the knowledge that going that far won't ever result in his dubious plans advancing to the point where anyone is harmed.

If you talk to him again, however, he'll offer you another "simple task" to deliver a pair of Black Magic Dolls to deliver to some bandits in the Old Smuggler's Cave...
After some humorous dialogue between the protagonist and necromancer (who urges you to stop asking questions and "think on the money"), you'll find that this is where the fun stops on a pacifist run (unless you're diving into a truly murky grey area), since delivering the dolls would cause the smugglers to perish in a fluctuation of necromantic energy...
We didn't do that in our run, but admittedly created an alternate save file "to see what would happen," since the dialogues were too amusing to miss:
If you deliver the dolls and then return to Basil Tylar to report your success, the necromancer will be surprised and thrilled that his experiment worked, and reward you again. If you aid him in further dire tasks, however, the necromancer (and perhaps you) will get more than you bargained for:
This time Basil Tylar will confide that he's taken it on himself to use his dark powers to murder Erbat Skelden, who he considers a usurping tyrant. He's not alone there, of course, since many villagers feel the same— but as it happens he'll never get the chance to carry out his plans: After he sends you on a quest for more hangman's rope (which you'll never be able to collect and return to him), the quest will update itself after you leave, and if you double back and return to his house you'll find the necromancer has already been hunted down and killed by a Skelden soldier who found out about his plot...
The Skelden officer reports that the assassination plot is foiled, and that the culprit who aided the necromancer (you) will soon be apprehended as well...
At this point you could simply deny having any involvement and still receive some additional experience to bring this dire interlude to an end, but our choice was to instead reload our older saved game and restore everyone involved back to life again.
A theoretical alternative approach: We didn't think of this the first time during our run, but if you waited until you had the level 15 Air Magic spell "Resurrection" before talking to Basil Tylar a second time, you might be able to carry out his quest to deliver the black magic dolls to the smugglers, and then promptly resurrect both smugglers immediately after they are struck dead by the dire power of the dolls.
You could then try to go back to claim the rewards, get the final quest, come back after the Skelden soldier slays Tylar, deny involvement (to receive more xp rewards), and finally: Wait for the Skelden soldier to leave, then resurrect Basil Tylar himself. If this works as well as similar tactics in Ashos and elsewhere, it might enable everyone involved to live happily ever after. (Like Asmohar though, we don't know if you'll actually be able to find the slain Basil Tylar in order to revive him.)

Helping Orm Varagor is arguably the least controversial way to gain some good reputation with the necromancers, but it will first require getting rid of some skeletons in the Thieves' Cave, to help out the hapless thief Tyco Thorn:
See COVENGOR GUIDE for additional details.
In short: Thorn was ousted by his own skeletons, who he hired a necromancer named Orm Varagor to summon for him, naively hoping they'd serve as bodyguards in his cave. After giving you a ring he stole so you can give it back to its owner Ash Lorus outside, he'll also ask you to clear the hostile skeletons out of his cave.

We skipped it on our purist run, but doing this is the only way to ever make Orm Varagor appear. We tested this out just for fun and found that Thorn is actually more than a match for the skeletons despite his timidity— though you'd better keep a paternalistic eye on his health if you want to make him do all the dirty work. You could also cast Chaos Rage on the skeletons to make them fight each other, and resurrect any fallen skeletons with the Resurrect spell to revive them and tip the balance if your favor. (All this will also exclude you from "cheating" by acquiring any xp from the dispatched skeletons, which you'd receive if you went with a direct solution like casting "destroy undead" or just clubbing at them with a blunt weapon.)
If you decide to go in for this fiasco, your reward will be xp and gold from Thorn, and also a new quest to go speak with Orm Varagor...

Up the steep mountain paths north of Covengor, you will find a noteworthy hut with a necromantic spellbook placed in a lecturn inside a fenced-in yard. If you didn't clear Thorn's cave of skeletons, it will remain empty. But if you did help Thorn, then the necromancer Orm Varagor will be found outside in his small fenced courtyard.
As necromancers go, Varagor is pretty benign as far as we could see: Rather than pursuing concepts like assassinating people with hexes using hangman's rope and black magic dolls, poisoning wells, or raising legions of undead orcish ghouls, Varagor only wants to escape the worldly sphere. To accomplish this, he is preparing a rite to transport himself into a netherworld which he believes will be more suited to his tastes— but he needs a large quantity of Taint Shoots (plant shoots infused with necromantic taint) in order to accomplish this.
This initiates four different quests, but all simply involve picking various quantities of glowing taint shoots in haunted graveyards, and bringing them back to Varagor. These taint shoots are very easy to spot, since the taint causes the shoots to illuminate like flares which are easy to spot from a distance, often being visible even in broad daylight when passing by the walls of a graveyard...
The first of these quests is called "Bring Me Some Taint" in the Questbook. The other three have titles something along the lines of "Bring Me Some More Taint," or "Bring Me Even More Taint,"  and conclude with "Bring Me Some Taint One Last Time."
Completing these quests will reward you with increased reputation with the necromancers, and various necromantic spell cards— and, of course, will enable Orm Varagor to complete his rite and vanish into a supernatural gateway to the Netherworld in which he wishes to retire.

Society Mage Seloth Brotun's quests in Quidnar might have been included here, since he'll give less-than-subtle hints that he is developing a consuming interest in necromancy as part of his research, and wants your to bring him a skeleton spell and senior necromancy staff. However, on checking our results, it seems this will actually reward with you Society reputation: After you learn that Brotun has rebelled from the Society and become a lone wolf necromancer himself, he'll have already become hostile, so there's no reputation to gain with the necrolytes in his case.

The dead forest is found in the same blackened wastelands as Fire Claw Tower and Gor Gammar. There is little or nothing to be gained here for a pacifist run, but if you're curious (like we were), you will find an unsettling "Old Abode" in this fearsome place, inhabited by a necromancer named Asmohar...
Asmohar is one of the most memorable necromancers in the game, but also one of the least suitable people you could ever get involved with in any pacifist run in which the preservation of lives is a paramount concern:
Asmohar will claim that he can use his powers to grant you a powerful weapon to use against the orcs of Gor Grammar. In order to grant you this weapon, however, he'll demand a scorpion's poisoned gland, requiring you to bump off one of the monstrous scorpions found nearby, after which he'll also ask you to slay all the octogrons lurking near the ancient stone temple in the forest.

Asmohar will then summon you to a meeting at the ancient temple, where he will give you an item with a truly memorable and distinctive title: the "Necro Orc Killer."
If you take this item to the Gates of Gor Gammar and use it there, it will cause an explosive blast of insalubrious magical energies that cause every single orc at the gates and inside the entire stronghold to drop dead within a few seconds, allowing you to walk in and take the Relic Fire Stone from their altar with no opposition.
If you return to the "Old Abode" to report your success, however, you'll find a paladin named "Paladine" there: He will have already slain Asmohar, who he says raised up an army of orcish ghouls with his necromantic arts. (If you returned to Gor Gammar at that point, you'd find some credence to this story, since it will now be full of shambling ghouls.)
One thing we never thought of at the time (and therefore never tested) though: Players whose sense of humor compels them to seek out Asmohar and use the "Necro Orc Killer" might actually be able to try using the Ressurection spell on all the dead orcs in Gor Gammar to bring them back to life "reformed," and also to then go back and cast Resurrection on our friend Asmohar back at the Dead Forest, if you can find where the paladins left his body...
If that doesn't work though, you can still do as we ended up doing on our "proper" pacifist run (after reloading our save game file to restore everyone to life), and make your journey into Gor Gammar a wholly non-violent walking tour by simply putting on the Orc Camouflage Armor. This causes everyone to remain alive and well, including Asmohar at the Old Abode.
Final note on the Dead Forest: If you travel all the way to the northeast corner of this place, you could also take the Relic Air Stone from a dragon's nest that you'd mysteriously find there, but a more rewarding way of doing this that includes the backstory will be presented to you if you first visit the Drak'Ar Desert and talk to a desert-dwelling hermit named Ari Aldamor "the Dragon Whisperer" first: See the section on the Drak'Ar Desert for details.

If you obtained enough reputation with necromancers by completing nonviolent quests for relatively harmless characters like Orm Varagor (who just wants you to gather some tainted plant shoots so that he can try to banish himself to the netherworld for a change of scene), your only real reward in the end will be to get let inside the necromancer's new cult "haven" in the wastelands, which they call "The Enclave."
As with all places in Two Worlds, there's plenty of atmosphere and interesting dialogues to read here, but the Enclave is more or less a flop when it comes to nonviolent pacifist run questing, since everyone here will ask you to kill someone or something. The only other quest we know of involving the Enclave would be Sygius Destrus' quest "Public Enemy" to go and assassinate The Flame, so we gave the whole place the miss on our latest pacifist run through the game.
The Enclave can be found in an inhospitable hilly desert environment some distance directly south of the ruins of Hadeborg Castle, in the war-scarred regions south of the River Gon. The first person you'll meet when approaching the gates of the enclave is the guardian Solvan. He'll only let you inside if you have a high enough reputation with the necromancers.
You'll be able to meet a number of interesting characters in here, but the quests unfortunately all involve some type of violence:
Xavo Wellmark will try to get you to go bump off his brother, who has (shockingly) been driven insane by necromancy, and is now inhabiting a less than cheery lair called "Blood Cave," where he is busy raising up various undead monsters. (Exactly why this behavior allegedly constituted "madness" compared with what the rest of the necromancer were doing has slipped our memory, but we declined to carry out the assassination request regardless.)
Another necromancer named Ito Tamaga has a grievance against some "beasts" (reapers, as it turns out), who he says have been defiling hallowed ground with their presence, and disturbing his experiments. We gave him a miss as well, even if we're not quite as fond of Two Worlds' Reapers as we are of Thief Gold's Burricks.
If you completed these two quests, however, the necromancer's cult-leader "The Flame" would appear at The Enclave. After holding forth for some time about her metaphysical beliefs, The Flame will try to get you to agree to go poison the well at Four Stones village, which she indicates will be a stepping stone toward bringing about some type of necromantic nirvana...
Our choice was to give this request a miss and leave our friends at Four Stones village alone, so this pretty much wrapped up our visit to the Enclave. (As far as we know, you won't ever have to worry about the necromancers wiping out Four Stones Village on their own either.)
In utilitarian terms, the necromancers turned out to be the least useful faction to deal with in a Two Worlds pacifist run, but many of the encounters certainly were entertaining. Now, at last, it's time to move on toward the conclusion of Two Worlds I...


Two Worlds Pacifist Run - Gor Grammar & Hadeborg Castle

The savage armies of orc invaders have lain waste to the countryside all the way from Gor Gammar to the fringes of the disputed zones south of the River Gon, where the human defenders are holding them off at Quidnar and Cathalon. The battle at Hadeborg Castle is already over by the time your quest begins, and the castle is in ruins infested with orcs and ogres, some of whom are still guarding the stolen catapult triggers that the defenders of Cathalon fear they will copy to learn how to build their own siege technology...
Viewing the orc-infested ruins of Hadeborg Castle from a ridgeline above the war-blackened valley..
Even further south, the still smouldering volcanic mount above Gor Gammar has turned the sky a dark red, mingled with the deathly energies of The Taint emanating from the black spires of the necromantic Fire Claw Tower...
Gor Grammar viewed from the mountain roads of distant Thalmont...
At the foot of the volcano stands the fearsome stone fortress of Gor Gammar, where the orcs keep the Relic Fire Stone in a central altar wreathed in flames and surrounded by demonic warlike banners. Dozens of orcs swarm in these hostile environments both inside and outside the fortress, and inside the claustrophic and dystopian "Path of the Doomed" leading underneath the fortress walls...
Gor Gammar 
Yet, despite all the above, this is actually one of the most easy "walkover" points in any pacifist run through Two Worlds I, thanks to a very useful asset called the "Orc Camouflage Armor." If you haven't already bought Orc Camouflage armor yet, you can get it from the Cathalonian armorer Creo. (See CATHALON section for the details, which will just require you to talk to a few key characters and pay a total price of 7,000 gold for both the armor and an authorization order from the sergeant-at-arms.)
More Optional Fun With the Orc Camouflage Armor:
If you're ever short of gold at any time after you obtain the Orc armor, donning it and taking care of the quests at Hadeborg and Gor Grammar while you also tour the orc-occupied countryside is also one of the easiest and fastest ways to accumulate a fortune in stolen orcish plunder: As soon as you put on the Orc armor, you can walk right up to every orcish treasure chest in the game and loot it right in front of them without even having to use the sneaking skill, and they won't raise any objections.
Orcs, ogres, groms, serpentfolk, and more will all accept you as an ally, so long as you're wearing the Orc Camouflage Armor...

Since orc camps with treasure boxes are found all over the map south of the River Gon (as well as many other camps where the orcs have infiltrated northern territory), you can probably find more than enough treasure this way to buy whatever you want later on from the city merchants.
Other great places to visit to get the most fun out of your suit of Orc Camouflage Armor (which can only be put on and taken off again one time) include most of the orc war camps south of the river, and also the Deladkull glacier. The armor also makes creatures like Groms friendly toward you as well, opening up more possibilities for goblinoid tourism and caving back in the northern reeaches of Thalmont...
It isn't ever mandatory to get the Orc armor though, and you can still complete a pacifist run through these areas easily enough using only the sneaking skill, the Freezing Wave and/or Earth Chains spell, and of course the foundational tactic of just running away from enemies using the hero's superior running speed...

Now for the details on solving the two primary quests you'll find in these hostile environs :
Checking out Hadeborg Castle after donning the orc camouflage armor...
The entire region of Garnowald south of the River Gon is covered in orc war camps and both small and large bands of orc warriors. After riding South of Quidnar, you will find the ruins of the impressive hilltop castle of Hadeborg standing in a blighted burnt plain scarred by war, and now surrounded with mists and strange beasts.
If you spoke with a Cathalonian soldier named Raul Dang in Cathalon, he will have engaged you to recover three catapult triggers from the orcs who conquered Hadeborg Castle. The Cathalonians fear that the armies of orc invaders will eventually study these catapult triggers, and will learn from their designs how to build their own siege engines, making them even more dangerous adversaries.
If you have the Orc Camouflage Armor, the required tactics will be more or less as follows: Walk directly up to the castle ramparts, walk up the main paths past the grunting orc and ogre warriors (who will accept you as one of your own and make no move to stop you), and walk directly into the castle, where you'll find some treasure to loot for your own use, along with the three catapult triggers.
The stolen catapult triggers you seek are in this area
There is even a teleport in the middle of the castle ruins near the triggers! Alternately, if you left your horse nearby, you can just walk back out the way you came in and ride away with no questions asked.

For those who prefer a more sporting approach:
We also tried sneaking into Hadeborg Castle at night to see if we could get in without the Orc Camouflage, but couldn't quite manage it even with the level10 (maximized) sneaking skill, since there were such thickly clustered bands of orc warriors and ogres in there that they repeatedly spotted us. (We're sure sneakier stealth players could have managed it though.)
If you like a chaotic looney-tunes styled run-around, of course, you could also just run into the castle and cast spells like Freezing Wave or Earth Chains, perhaps thickening your defenses with some potions to boost defenses against orc arrows.
Either way, all you'll need to do is grab the three catapult triggers so the orcs can't use them, and escape.

One major caveat: You shouldn't try to give the catapult triggers back to Raul Dang in the city of Cathalon until later on, after you're ready to take off the Orc armor, because the majority of human characters in the game won't recognize you when you're wearing the Orc armor, and many will even try to kill you. After you take off the Orc armor and go back to give the  catapult triggers to Raul Dang, though, he'll reward you with a solid sum of gold, experience points, and increased reputation with the Brotherhood for your heroic deeds.

You'll find Fire Claw Tower along the main road leading south to Gor Grammar, and the Dead Forest further to the east. There isn't much to do in either of these places on a pacifist run, as far as we know: Fire Claw Tower is a decidedly sinister spectacle to behold, but is just another ancient tower being abused by necromancers, with no quests to obtain or complete here.
The Dead Forest is another sinister major location: A huge forest burned to cinder and dead husks of huge trees, covered in smoggy fog, and infested with foul creatures like demonic octogrons and giant scorpions. This is actually a place you could visit in order to acquire the Relic Air Stone, but the more interesting and rewarding way of doing that is covered in the section on the Drak'ar Desert.
There is also one more interesting encounter with a non-hostile character in the Dead Forest, however unsuitable he may be for a pacifist challenge run: See the separate post regarding Asmohar in the "Necromancers" for details.

Now let's move on to the great orcish stronghold itself:

The Orc Stronghold of Gor Gammar & the Relic Fire Stone
Beneath the imposing sihlouette of the still active volcano, you'll find the imposing black stone fortress of Gor Gammar on a central road heavily patrolled by platoons of orc warriors and archers, flanked by more large stone constructs, and surrounded by cracks glowing with live maga flows.
In our version of the game, wearing the Orc Camouflage Armor enabled us to walk in unopposed, but not to open the front gates. However, getting into the fortress is nearly as easy (and much more profitable) by going through the dystopian "Path of the Doomed":
The gates of Gor Gammar
This is a sinister claustrophobic passage which you can access by going a short distance east along the outer walls, and entering a black cave opening leading into ugly stone dungeon-like passageways and chambers with low ceilings. It's filled with grunting orcs, of course, but also well-stocked with orc treasure boxes. As usual, the orcs won't mind if you loot the boxes for yourself, as long as they think you're one of them while you're wearing the Orc Camouflage Armor.
Inside the fortress of Gor Gammar
Once you reach the end of the Path of the Doomed, weighed down by orcish treasure raided from their chambers below, you'll emerge into the impressive megalithic interior of the fortress and be able to go on a tour of the orc's habitations within. 
Approaching the Fire Element
After any optional sight-seeing, you'll find the Relic Fire Stone sitting in a central altar wreathed in flames and surrounded by demonic warlike banners. However, all you actually have to do at this point is walk straight up to the Relic Fire Stone and take it...
Doing so won't cause the orcs to attack you (unless you take off your armor, of course), and you can leave Gor Gammar just as quietly as you came in without any opposition from the orcs.
Of course, if this isn't sporting enough for you, by all means go ahead and give the orcs a run-around or use the sneaking skill to get through the Path of the Doomed using stealth, but even this shouldn't be too difficult since the paths are less thickly congested with orcs than they were at Hadeborg Castle.
After nabbing the Fire Element and putting a healthy distance between yourself and the swarms of orc warriors in and around Gor Gammar, there's no vital remaining use for the Orc Camouflage Armor. However, if you're in the mood for a restful change of scene after all the fire-and-brimstone tourism here, we recommend also visiting the Deladkull Glacier back in Thalmont, and the snow caverns of "Ganga Cave." (The Glacier Orcs out there have some treasures to hand you as well, and they won't attack you either, as long as you're still wearing that Orc armor.)


Two Worlds Pacifist Run - The Drak'ar Desert

The people of the Drak'Ar Desert are obliged to live a stoic life due to the harsh climate and many dangerous beings prowling the wastelands, though the desert isn't lacking in a harsh form of natural beauty either...
Drak'Ar Desert
The furthest northern settlement in Drak'Ar is an Oasis with few inhabitants, and the larger settlement Xanthos is home to many more, but you'll find a total of three characters in these who will give you quests, along with a hermit living in the desert who will give you another. 
Most crucially: You will find the Relic Air Stone (needed to complete the relic and the main storyline) on the other side of the southern mountain range, inside a dragon's nest. It would also be possible to claim the stone by entering through the gruesome dead forest from the south instead, but there are no pacifist run quests there that we know of. Our preferred approach was therefore to visit the desert first, to gain the maximum possible nonviolent rewards from completing some interesting quests here. (Entering the desert before heading south will also lead you to the most scenic route to the dragon's nest, through a secret tunnel in the range...)

In the larger settlement of Xanthos, you will find a woman named Kimal who tells you that Varns (aka Jackals) often conduct raids on the village, and that one of them fell into the well during one such fiasco, causing the water to become contaminated...
Kimal of Xanthos, standing beside the well which requires purification to save the village...
In order to purify the well water again, she needs a potion brewed from the old mage Pak'mun, and will ask you to make the dangerous journey for her to speak with him.
The good news: This journey isn't dangerous for you at all, since you can easily outrun everything, as always. The bad news: After speaking with Pak'Mun, you'll learn that you're going to need a scorpion gland in order for him to complete his potion...
Pak'Mun, desert mage and alchemist...
Scorpions in Two Worlds aren't small scuttling things with deadly stingers, but are actually gigantic monstrosities about the size of buffalo. You won't be able to negotiate with the scorpions to get them to sell you a stinger, so you could throw in the towel here and hope someone less scrupulous comes along to save the village...
However, if the desire for a stinger to complete the quest outweighs your ardent opposition to in-game conflict, you could also do something like casting Chaos Rage on one of the scorpions to get them into a fight, and then cast Resurrection on them after first "borrowing" a stinger.
The two scorpions haunting the ruin directly below Pak'Mun's camp would of course be the obvious choices for this exercise.
If you bring Pak'Mun the scorpion gland: Pak'Mun will prepare a "Depoisoner" potion with the poison gland, and you'll receive experience points as a reward. You can then return to Xanthos and give the Depoisoner to Kimal, and she'll thank you and reward you with more gold and experience. 
(Note: We also found lots of depoisoners at other times, and aren't sure whether you could actually give Kimal one of those as an alternative, if you want to try out a purist alternative that might save a giant scorpion's life.)

Thilatus is standing a little ways north of Kimal in the settlement of Xanthos, and he'll tell you that a dangerous pack of jackals are preparing to perform a raid too fierce for the defenders to withstand. He implores you to go and destroy the Varns to save the village, offering you rewards if you have the bravery and skill to do this.
We can't be sure, but strongly suspect that the Varns he is worried about won't ever actually attack the village, and that they would not be a match for even a handful of the warriors of Xanthos if they did attack— but that turns out to be a moot point:
Outside the Varn encampment...
After receiving the quest from Thilatus, you can ride south toward the Varn camp on your map. We weren't expecting to be able to do anything with this side quest on a pacifist run, but discovered an unexpected bit of good luck: While running into the middle of the Varn camp for some snatch-and-grab raids on the Varn's treasure, we were surprised by the sudden sounding of the "quest completion" fanfare, followed by a message stating we'd received an reward of one skill point just for running into the middle of the Varn village. Our quest book was then updated, informing us that we'd dealt with the Varns— even though the entire village full of them were still walking about alive and well, and we hadn't fought with a single one of them.
A cynic might call this an AI exploit, but we thought it was fair enough, as there is no way those Varns would actually have been able to destroy Xanthos even if they'd ever tried. We consequently wrote this off as a "reconnaissance" mission in which we were able to allay Thilatus' unnecessary pessimism concerning the menace of the Varn camp, and returned to give him the good news that the village was now safe. Reporting to Thilatus at this point will reward you with experience.
Also, if you mention the White Dragon to him, Thilatus may also advise you to speak with Ari Aldamor, the "Dragon Whisperer..."

As far as the main storyline quests are concerned, one of the most important characters you'll meet in the desert is Ari Aldamor, the "Dragon Whisperer."
You can find his hut more or less in the central desert slightly northwest of the center and west of Xanthos, near a stone ruin.
The hute of the Dragon Whisperer Ari Aldamor
Aldamor will tell you the story of the White Dragon: It would seem this beast now rules the desert as a sort of tyrant. Aldamor says no one knows exactly why the White Dragon went bad, but that it murdered another dragon and was banished by its kind after they maimed it as punishment.
However, the White Dragon nurtured a venomous grudge during its exile, and hatched a plot to revenge itself by exploiting the power of a strange crystal:
Ari Aldamoor tells the tell of the Albino Dragon called "The Great White One"
The other dragons normally hid their eggs in nests in craggy lofts were the vapors in the air were deadly to intruders, but the White Dragon discovered that it could use the power of the air crystal to enable a group of Varns (anthropomorphic jackal-men) to sneak up to the eyries and steal the other dragon's eggs, which it now holds for ransom.
As you may have guessed, this strange crystal the White Dragon used on its minions to enable them to steal the eggs is none other than the "Relic Air Stone" which you need to solve your quest to restore the Relic...
The White Dragon's stomping grounds in the Drak'ar Desert...
As for the dragons' eggs: Each dragon can only lay one egg over its lifespan of centuries, so the dragons are now beholden to the White Dragon, who reigns over them as a sort of vengeful tyrant, according to Aldamor.
(The other denizens of the desert don't have much to say in the White Dragon's defense either, as you'll have already found out by visiting Xanthos or the Oasis.)
Aldamor suggests that if you could find out where the White Dragon has hidden the eggs it stole, then he could bring an end to its reign of tyranny by removing that source of its power over the other dragons...
Near the top of the secret pass leading to the White Dragon's secret hoard...
At this point, all you have to to solve this quest is to travel to the southern fringe of the desert and explore, until you will find a pathway through the crags that leads into a foggy and smog-filled stone tunnel...
The tunnel winds down a steep sloping path underneath the crags, and emerges at the base of a sinister dead forest: Here you'll find the White Dragon's hidden hoard, which contains both the stolen eggs the dragon is holding for ransom, and also the Air Element, whose powers the White Dragon abused to carry out its theft of the eggs.
The White Dragon's hoard contains the stolen eggs, and the mysterious crystal, which is none other than the Relic Air Stone...
You can now walk right up and claim the Relic Air Stone, solving your own part of the Relic quest...
As for the White Dragon:
Unfortunately, at this point, we're not sure if there's any way to provide a happier ending to this drama than by either telling Aldamor about the eggs, or by just leaving with the Air element without resolving the rest of the dragon quests:
Experience points received for reporting the location of the dragon's lair to Ari Aldamor
If you did the latter, of course the White Dragon will remain a tyrant over the desert, while if you do the former, the other dragons will go and kill the White Dragon for revenge...
The White Dragon is no match for the others, since he was maimed by them when they banished him a long time ago, and finding him slain is a bit depressing, even though it rewards the protagonist  just for witnessing the event.
He may have been a bad egg, but we still felt sorry for him at this point...
Note: Since every creature that you resurrect with the spell remains permanently friendly to you after it gets revived, our hope was to bring the White Dragon back to life, but unfortunately we hadn't found the Resurrect spell yet when we first completed this quest.
Most slain creatures in the game don't ever disappear, but unfortunately we were disappointed to find the White Dragon's body had disappeared when we returned with the Resurrection spell.
But if we ever do another run through Two Worlds, we'll definitely make sure to have the Resurrection spell ready as soon as we reach this point, just in case we can bring a kinder and gentler White Dragon back to life, the same way we did with the Ogre at Windbreak Village, the orcs at Ashos, and a great many others...
We didn't have the Resurrection spell at this point, but next time we'll definitely try it before the other dragons deal out their frontier justice against this unfortunate creature...
There's one other theoretic alternative to the path we took:
PRANTAX'S QUEST: "Crystal Search"
This is an oasis (called alternately Kehar or Nahat, depending on which version of the world map you consult) where you will find a man named Prantax, who has an alternative quest to face the White Dragon:
Prantax will tell you that if you gather enough crystals and bring them to the Dragon's Lair, it will cause the White Dragon to eventually arrive there, so you can face it in battle...

We didn't test this one out, but mention it in case other pacifist challengers want to give it a try and compare the rewards: After all, in places like Earth Claw Tower and the Varn's encampment in eastern Drak'Ar, we were surprised by being given quest rewards just by sneaking or running into each dangerous site, without ever having to kill anyone or anything there.
However, if that approach failed, you could also presumably just run away with ease, like you can from virtually every other foe in the game, including the much tougher Sand Dragons found throughout other parts of the Drak'ar Desert...