King Praetor in his castle in Dernholm will ask you to collect taxes from Black Root.
Travel to Black Root and speak to the mayor. He will tell you that Black Root is now allied with Tarant instead of Dernholm. However, the Tarant guards haven't been able to get his dagger back from thieves.
A)Speak to D'ak Taan in the thief camp on the other side of the river by the train station. Either buy all his items from him, kill him and take the mayor's ceremonial dagger from his body, or pick pocket the dagger from him.Give the dagger back to the mayor and ask for the taxes. He will switch his alliance back to Cumbria. You'll get 800 experience plus gain alignment
B) You can show the mayor the newspaper from Dernholm, and suggest he might want to keep Black Root out of the coming conflict between Tarant and Caladon . (For some reason the dialogue option for giving the newspaper to the mayor doesn't always appear. If you have that problem, try putting the newspaper in your main character's inventory, reading it again, and then exiting and re-entering the area.)
C) You can steal the taxes from the mayor's inventory, and then point out his Tarantian guards couldn't even protect him from petty thieves.
Return to Dernholm and give the taxes to King Praetor.