Creepy. Just plain creepy. Must be the eyeball in the forest. Looks like an observatory saw something it wasn't supposed to in the stars and something came down to punish the people for daring to look. Then it hid in the forest. Not sure what that is to the east of the forest, but it is probably where the survivors went, driven mad by the thing from beyond the stars, they now wander, performing black rites and cannibalistic acts. Those who saw the symbols in the ground to the south now toil endlessly in the island tower, building an intricate machine to allow the creature to bring more of it's kind into the world. Stay away traveler, stay away! The wolf came to the shore looking for escape from this awful place.
On another note, I dub the observatory Arcrim's Folly.