Winiel has deciphered the lore-fragments you brought her with the aid of the book you acquired from the toad Greatroar. With your aid she has gleaned knowledge of a fire-grim that haunts the Mines of Moria.
'Your investigation has proven both fruitful and distressing. Apparently the dwarves of old were plagued by a fire-grim of no meagre stature, perhaps a servant of Durin's Bane.
'If this creature is allowed to linger here, it is entirely possible it will find aid from the other agents of the Enemy that have come to claim Moria. We cannot let that come to pass!
'Gather your friends, ${PLAYER}. Head into the Forges of Khazad-dûm, east into the Flaming Deeps, then south at the Cross-roads of Ash. Once there, use this tome to summon the fire-grim Ruingal and defeat him.'
Enter the Forges of Khazad-dûm, summon the fire grim, Ruingal, and slay it.
Winiel is at the Rotting Cellar in the Water Works, north-east from the Forges of Khazad-dûm.
You should return to Winiel with tidings of your victory.