The bounty's for Naroc the Prophet, a Glanfathan exile. He was banished from his tribe for his, ah, extreme views. Naroc's a cipher, and it seems like he's taken an interest in an Engwithan site north of Gilded Vale - Cilant Lis. Several tribes have pooled together the coin for his bounty - they say they don't want him tampering with some 'machine' out there.
Once you have the task, travel to Cilant Lîs (the outdoor area where you became a Watcher at the start of the game), and walk a few steps forward towards the Engwithan machine.
Naroc the Prophet (a 12th level cipher) and his party hide out there, and attack as soon as they see you:
|0||Bounty: Naroc the Prophet|
|10000||The Glanfathan exile, Naroc, has had a bounty placed on his head by several Glanfathan Tribes. He was said to be traveling to the ruins of Cilant Lîs.|
|1||Kill Naroc and take his head.|
|10001||Naroc is an exiled Glanfathan cipher, condemned for his extreme views. The Glanfathans are willing to pay a good sum if I travel to Cilant Lîs and separate his head from the rest of him.|
|2||Bring Naroc's head to Warden Fyrgen in Caed Nua.|
|10002||Naroc has been dealt with. All I have to do is return his head to Warden Fyrgen, and claim my bounty.|
|30000||I claimed the bounty on Naroc.|