Wiki - The Naughty List
Santa himself is asking for help this year. Gryla has stolen his Naughty list and abducted all the children on it to create her favorite meal.
Defeating Gryla is the only way to save the children, but to do that you must first reach her.
Defeat a number of Gryla's minions, in the Ice Dungeon in Felucca, and return to Santa to receive the objects you'll need to enter her lair to face her.
This quest is repeatable every 8 hours.
For completing the first part of the quest, Santa will create a Frozen Cauldron, which which is needed to approach the entrance to Gryla's lair.
Gryla lives outside the second entrance to the Ice Dungeon in Felucca.
Defeat Gryla in her lair and get her sack off her corpse as proof of the deed. Return to Santa to receive your reward!