At this stage, Gerhart's will be sending his heroes to attack you and try to conquer your town. Make sure you have enough fortifications. Recruit more units, then its time to go on the offensive.
First, head east. Karloff's town, Rauchburg, should be there. He keeps attacking you from there. Eliminating this threat will give you a big advantage, in addition to being able to produce more units.
You should build portals in your town so you can teleport your heroes between them.
Head Southeast from Ashwick, past the barracks. You will unlock a new quest:
Unexpected Liberator
Primary Quest - Active
Gerhard didn't really learn the lessons of the Orc crusades - Orc slaves can still be found in the Wolf duchy. Orcs are Sandor's friends and allies. He must free then when he can.
Objectives:
Active Objective: Free the Orc slaves
0/4 Slave camps liberated
Rewards:
+2 Destiny
+9475 Experience
Bone Spaulders
There is one slave camp to the south. It has orcs and shamans and lots of resources. It is guarded by a single enemy hero.
Rescuing these orcs will also unlock SHAMANS for your city. So you should do it as soon as possible so that you can start recruiting shamans for your army.
The orcs in this slave town will also tell you about Irina and advance you to the next objective in the primary quest "Stealth, the Orc Way". Your next active objectives there are to find the hunting lodge and defeat Markus.
To the east, there will be a group of goblins being attacked by Griffins. Kill the griffins to have the goblins join your army
To the east of Rauchburg there is a sign. It says "South to Portsmith. A parchment has been tacked to this post offering a reward to anyone who returns a helmet that has been lost by its owner. The Helmet of Crag Hack probably has a lot more then just sentimental value"
Just North of Rauchburg, there's another group of Orcs guarded by some crossbowmen. Defeat the Crossbowmen and recruit the orcs to your army.
If you head North you will reach a Garrison. Your hero will say it's too strong for him, but that he'll be back. You have to complete the quest "Unexpected Liberator" before advancing in this area.
Head South, and then East. This will take you to the town of Portsmith, guarded by Eduardo. Conquer the town if you can.
