Caed Dhu is the location of a druids' circle. In the Elder Speech the phrase means Black Forest, or Black Grove. It is located in Angren, on right bank of the Yaruga, east to Red Port.
Geralt's hanza wanted to visit it to search out the druids for information on Ciri's whereabouts.
Spoiler warning: Significant plot details follow.
While the druids originally lived in Caed Dhu, they were later forced to flee south to Loc Monduirn and, later, Caed Myrkvid.
Significant plot details end here.