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”.

The Forge Lands¶

$$$item 1617

The Kingdom of the Dead¶

$$$item 1618

Lostlight¶

$$$item 1619

Shadow's Edge¶

$$$item 1620