Oakun wants you to take the Dread Relic to the Writhing Mound. Once there, kill Auchenai Death-Speakers and Auchenai Doomsayers to collect 20 Doom Skulls. Then find the Writhing Mound Summoning Circle and use the Dread Relic to summon and destroy Teribus the Cursed. Return to Oakun when the deed is done.
Now you must use the Dread Relic in a foul necromantic ritual if you wish to challenge Teribus the Cursed. To the northeast, beyond Auchindoun, is the Writhing Mound, a place where necromancers gather.
The auchenai death-speakers and doomsayers carry doom skulls that are laced with powerful necro-enchantments. If you collect enough skulls you can use their power along with the power of the Dread Relic to command Teribus to face you.