Orcs serving the White Hand are clear-cutting the forest and shipping the wood off to an unknown location.
'${PLAYER}, while I have no care for the Dunlendings and their forest, I do wonder how much wood these Orcs have already cut... this may help decipher for what the wood will be used. A relatively small amount may indicate something as simple as fire-wood or spears. A large amount, on the other hand may indicate the construction of siege-weapons.
'If you wish to help me, go to their encampment, Ak-ghru, and investigate the clear-cut wood. Perhaps you will be able to determine exactly how much wood the Orcs have taken and how much more it appears they are determined to take.'
The clear-cut forest can be found at Ak-ghru.
Elfrith asked you to investigate the clear-cut part of the forest to determine how much wood the Orcs have gathered.
Elfrith is hiding beyond the bounds of Ak-ghru.
You should report to Elfrith that the Orcs have cut a large amount of wood, probably for use in building siege-engines.