The goblins are much more in view in these days. They are hijacking trade caravans, attacking rural places, and just generally being even more of a nuisance to the world than usual. Because of this, a bounty is placed on their heads for each individual goblin dealt with.
This leads the party to look into a cave system in the Daenian forest, which leads into a tomb. In this tomb, the Goblins are holed up, protecting their loot, and worshipping this strange idol of an antlered individual.
There is a reference to a Goblin King and a god they follow, which are both unusual things for goblin society. In time, the party encounters the goblins in multiple locations, including another cave off the side of a main road, and in the company of Vosh Rakh Orcs.
While it seems as if the Orcs and Goblins are working together, in Orcwall, it is seen firsthand, that the Goblins conduct a wide-scale rebellion against the Orcs with the support of Daedric forces.
Their king is the Erlking, and their god is an unknown entity only identifying himself as "The Forgotten One," but he does control Daedra and direct them. He seems to be on a level with other, well-known, Daedric Princes.