There are four Gnomes total hidden in some hard to find places throughout the game. There is one in each world. After collecting the first one, you will be given a side-quest “GnoMAD’s Gnomes” (For their locations, click on the relevant Gnome you’re after below).
$$$item 1617
$$$item 1618
$$$item 1619
$$$item 1620
Once all four have been found, you will recieve a message telling you to visit a Serpent Tome. Go to a Serpent tome and open the mail from GnoMAD to earn a new legendary item - GnoMAD Scythes. This will complete the quest.
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