On the fifth day, Igor will turn up missing and the townspeople will be gathered in the square discussing the situation. They'll have found a gypsy wandering outside town at the same time Igor turned up missing and demand that the gypsy be hanged for Igor's death. The long and the short of it is that if you don't save the gypsy in the next three days or so you'll die as he is hung and curses the town. You can break the gypsy out of prison at night if you have the skills to sneak into the Burgomeister's, but if you're not a thief you'll probably be caught eventually unless you find Igor as well.
Luckily finding Igor is a fairly simple task, he's not in town or at Dr. Cranium's so all that's left to check is the cemetery. You'll hear a low moaning sound coming from underneath a grave. Curiouser and curiouser. If you have enough brute strength you may be able to lift the tombstone by sheer force. Magic Users are actually able to cast open on the stone to lift it out of the way, and Thieves or Fighters may use the rope and pulley to acquire some leverage in lifting the stone. Igor will leave the tomb delighted and hobble back to town. If you talk to him later in town he'll give you a key to the crypt.
Things will settle down around town and after a day or so the gypsy you rescued will show up outside the gates of town and invite you to stay at the gypsy camp sometime. He'll also announce himself a shapeshifter and turn into a wolf. Head to the gypsy camp and you'll talk with Magda the fortuneteller and Gypsy Davy, the man you rescued. Ask her and tell her about everything you've come across, and pay her by giving her money from your purse to have your fortune told. She'll give a fortune which describes yourself and some of the players who have had an influence on your past, present, and future.
You should return to talk to her at least once in each of the following days until she has no more fortunes or information to offer you. You'll need to talk to the gypsies about the Destiny Spell to free Erana's staff, and every time you have your fortune told you'll learn more about some of the characters in the valley who will affect you.
You'll also be treated in a friendlier fashion by the Burgomeister, the innkeeper and the townspeople, and you'll be able to talk to Bella, the innkeeper's wife about the valley and what happened to her family in particular with losing their daughter.