This one-time instance of Cauldron Hollow is accessed by being on the quest, The Witch's Key, started by examining an old key that can drop randomly from any monster in Nektulos Forest. As the access quest is non-repeatable, a character can only have the key drop for them once and can therefore grant access to the instance only a single time. However, the instance can be entered any number of times if the character is grouped with someone else who has the quest.
No lore has ever been provided to whom the occupants of The Witches' Cove are or how long they have been dwelling there. Cauldron Hollow has been sealed off for hundreds of years so perhaps these current residents are merely dark elf squatters using this hidden area to practice necromancy.