The Nilfgaardian Connection - Velen
This quest is one the first quests you're given after reaching Velen for the first time in the Witcher 3. For the first part of this quest you'll need to visit the Inn at the Crossroads, an area in the central portion of Velen, west of Mulbrydale. Here you'll want to speak to the Innkeeper to trigger a scene where Baron's men arrive and start to cause a fuss.
As shown in the screen shot above, you have three options after Baron's men arrive and which option you choose affects how difficult a future story quest will be. For the easiest route later, try to cause as little trouble as possible at the bar.
1. Back off or die: Baron's men will become hostile and you'll have no choice but to fight them. This is the worst choice to make.
2. I'm a Witcher: This is the best choice as Baron's men will be too frightened to attack you. If you choose this option you'll be able to press the Inn Keeper for more information about Baron as well. Note: If you pester Baron's men or perform any hostile actions in front of them they'll attack you.
3. Care for a drink?: Leads to more dialogue where Geralt can either fight them or calm the situation and get the same result as choosing option 2.
Regardless of the option you chose, once you're done at the Inn your quest will be updated and you'll have to head over to the village of Heatherton to look for Hendrik. When you arrive there will be only one survivor and he'll be under attack by a pack of Rabid Dogs that you'll need to dispatch of.
Speak to him to learn that the Wild Hunt recently came through this village specifically looking for Hendrik. After the conversation head over to Hendrik's house and inspect his corpse, be sure to check his boots for a key - the item we're after.
Move the animal skin on the floor in the next room to reveal the door to the cellar, use the key you just found to unlock it and jump down inside. You'll find some goodies scattered across the cellar for you to pick up but most importantly you'll want to light the candle on the wall which will reveal a secret compartment.
The book inside the secret compartment will have a bunch of information for you, some of which pertains to Ciri. Once you finish reading the book you will complete this quest and receive two more quests, Bloody Baron and Hunting a Witch.