As soon as you move into the next area, the boss battle begins. An Infected Wargar, twisted by whatever foul liquid the Lord Mayor was mentioning, stands atop the Keep's walls and rains fire down upon you. It's flanked by Wargar Archers, and you can soon expect more Wargar to enter the arena.
The Infected Wargar charges up its minions with battle magic. When you see a Wargar Archer giving off red sparks, it's been magically empowered. Prioritize that target before it hammers you with powerful arrows.
The Wargar fighters in the arena are busy work—but critical. Cleave them down as soon as you can or else they will build up to an overwhelming force.
After two or three minutes, the boss drops down into the arena. Now you can directly engage the fiend. Keeping your distance is important at first, so use magic attacks to do as much damage as possible (while using rocks for cover) and then shift to arrows. Eventually, you have to go in for melee combat, but that presents a different set of challenges.
The Infected Wargar fights back, but if you use rolls and shields, you can avoid a lot of its incoming attacks and return with your own. However, after a few hits, the boss disappears in a red mist and reappears elsewhere in the arena. Right away, take cover because the boss starts hurling fireballs. The opening under the walkway from which the Archers pelt you is an excellent spot to take cover. Go from cover to cover, close in, and then slash away until the Infected Wargar vanishes again. You may have to repeat this a few times before its Health meter runs dry and you reclaim the Keep for Dyfed.
Following the battle, E'lara steps to the corpse of the seemingly mutated Wargar and uses the Deathstone to search its past for clues. The haze of the Deathstone reveals a Wargar army amassing around an obvious leader, which is one of the "changed." The leader offers human sacrifices to the Wargar, but first they must drink from a cauldron of the silvery liquid. Doing so converts the meager Wargar into a spidery war machine that looks like the monster Caddoc and E'lara just brought down. This means there are more of these monsters out there, so though the prize for completing the Lord Mayor's quest is still great, the risks are now even greater.