The island off the coast of the Barony of Luthien is actually called Kellix Island, but because Warlock Harbour is the most famous thing about it, some call it Warlock Island.
Kellix island has a population of goats (2HD herd animals), wild boar, oversized wildcats (same stats as mountain lions but looking more like lynxes or bobcats) and a colony of gnomes who avoid larger folk such as humans. The terrain is hilly and rocky with many short trees and shrubs, and patches of grass on the relatively flat areas.
Warlock Harbour was built in BY1221 by Daclune the Archmage at the request of Fernandis, Duke of Teiglin. The central part, the Repairing Dock, is surrounded by three towers. At the top of each tower is a gem that projects a magical beam onto any ship that is left in the repairing dock. The gems' effects are Woodform, Clothform and Ropeform respectively, and the enchantments were such that the gems required only a minimum of concentration and instruction to repair damaged ships.
Only a mid-level mage would be required to activate and control the repairing magic - in the beginning Daclune would leave this to his apprentices, but later the dukes would appoint succesive "Warlocks of the Harbour", hence the name of the place. The harbour was of great important to the Duchy and of note to the Toutus Empire - it was a very quick way of repairing ships damaged in battle or storms, and both the navy and merchants appreciated this. The Duke took the opportunity to charge a fee to anyone else seeking to repair their ship in Warlock Harbour, and it was a source of steady income until war broke out.
During the wars it was attacked and sacked by a force of marines from Telthus. Several ships in the harbour were sunk, the garrison was defeated, and the gems from each tower were seized and put onto the Telthian ship. However, they did not get far, as the mage who had been the warlock of the harbour emerged from hiding as the enemy ship left, and first cast a fireball into the rigging, setting the sails and mast on fire. Then he conjured a water elemental which promptly sank the Telthian ship not far from the mouth of the harbour, with the gems onboard.
The harbour has been abandoned since the wars, and one scouting mission revealed that the harbour had been taken over by gnolls, while in the waters of the harbour the shipwrecks, both Toutian and Telthian, are said to be infested with undead sailors. Retrieving the gems from the sunken ship (and finding the right sunken ship) is not going to be easy, especially if there is no magical way of breathing underwater.
Both the King of Teiglin and the Baron of Luthien would like to see the harbour restored to its former glory and usefulness, and would look kindly upon anyone who did so. There is the problem that both assume that the harbour would come under their own direct control, but that is for the rulers to decide.