Well, yeah, Terentius is a dick, but he's mostly harmless, and anyway, he's as much as his town deserves. I figure the Caros are much more dangerous because, at first glance, they seem so harmless. They're nice-looking, ostensibly decent, Nine-fearing folk. Everybody knows Regulus Terentius is a drunken lout who probably secretly worships Sanguine on the side. If you just interacted with the Caros on a casual basis, you'd think they weren't murderous racists.

Although it should be pointed out that Caro is really being a huge jerk to the player character the whole time. That whole White Stallion thing is totally an obvious brush-off. I mean, have you seen the lodge? He's turning to his advisors as soon as you leave and saying, "Can you believe that friggin' guy? And the orc? Haw haw!"