This will take place in the World "Losomn" in the sub region "Morrow Parish".
This will be during your time leading up to the nightweaver fight. (Can unlock after if you didn't do it at that time.)
You will first need to find 3 "Stone-Carved Dolls" located around Morrow Parrish. I believe they will be in different spots every playthrough because of the games randomness but I found one outside in the graveyard, one in a room on the second floor, and one in the attic.
With all 3 dolls go to the basement and there will be a locked prison door with someone inside you can talk to. Make sure to go through the dialogue and give the dolls to the person in the cell. (While you are here make sure to listen to her song and write down the numbers in it. She sings the code to her safe on the second floor. My code was 2971 but could be different every playthrough. This chest is not related to the achievement though.) You can eventually ask her to unlock the door and inside will be a new Doll you can collect.
Take this new stone doll and travel to the tormented asylum by going through the web in the basement or fast traveling if you've already been there. Use this doll on the web in the prison cell in the basement to get the special weapon and achievement.