One-Eyed Willy is the final boss of Plunder Cove, a dungeon in Temple Steppes. Note that this is not a storyline quest, but a side quest in Act I, so you might miss it. To enter Plunder Cove, you have to use the Fisherman's Lantern in Temple Steppes, near the river. This will summon Olwin, who offers you the quest "Ghosts of Plunder Cove". After accepting the quest, he will create the portal to the dungeon where One-Eyed Willy is located.