Hobolds are mythical creatures who wear red hats. They are apparently to be feared, but no reason is given. They are mentioned by the villagers in Upper Posada in the short story "The Edge of the World".
It is possible that "hobold" is regional pronunciation of "kobold".
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In German mythology, "kobolds" / "cobolds" were often depicted wearing red hats. In the original Polish version of the short story, the creatures' name is spelled "chobołd". Given the similarity of spelling, this may be the origin of the reference.