He usually spawns close to (& then runs through) the IBL camp. He can appear at the main camp also. I have no proof but what I have witnessed by my own actions. A friendly ranger ran by when I was camping the goblin town... sure enough the ranger said he was by IBL camp & that Grachnist was on tracking. Ranger was an awesome girl (or guy - but it was a female character) and dragged it over to me as I ran from gob town. When I was killing @ IBL camp I did also kill 3 Grachnist's but the earring is not commonly dropped.
I think we all have a story or several about someone unpleasant coming along to ruin the fun.
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