The plot focuses on Adam Salton, originally from Australia, who is contacted by his great-uncle, Richard Salton, in 1860 Derbyshire for the purpose of establishing a relationship between these last two members of the family. His great-uncle wants to make Adam his heir. Adam travels to Richard Salton's house in Mercia, Lesser Hill, and quickly finds himself at the centre of mysterious and inexplicable occurrences.
The new heir to the Caswall estate, known as Castra Regis, the Royal Camp, Edgar Caswall, appears to be making some sort of a mesmeric assault on a local girl, Lilla Watford, while a local lady, Arabella March, seems to be running a game of her own, perhaps angling to become Mrs. Caswall. Edgar Caswall is a slightly pathological eccentric who has Mesmer's chest which he keeps at the Castra Regis Tower. Caswall wants to recreate mesmerism, associated with Franz Mesmer, which was a precursor to hypnotism. He has a giant kite in the shape of a hawk to scare away pigeons which have gone berserk and have attacked his fields.
Adam Salton discovers black snakes on the property and buys a mongoose to hunt them down. He then discovers a child who has been bitten on the neck. The child barely survives. He learns that another child was killed earlier while animals were also killed in the region. The mongoose attacks Arabella who shoots it to death. Arabella tears another mongoose apart with her hands. Arabella then murders Oolanga, the African servant, by dragging him down into a pit or hole. Adam witnesses the murder which he cannot prove. Adam then suspects Arabella of the other crimes.
Adam and Sir Nathaniel de Salis, who is a friend of Richard Salton's, then plot to stop Arabella by whatever means necessary. They suspect that she wants to murder Mimi Watford, whom Adam later marries. Nathaniel is a Van Helsing-type character who wants to hunt down Arabella.
The White Worm is a large snake-like creature that dwells in the hole or pit in Arabella's house located in Diana's Grove. The White Worm has green glowing eyes and feeds on whatever is thrown to it in the pit. The White Worm ascends from the pit and seeks to attack Adam and Mimi Watford in a forest.
Adam plans to pour sand into the pit and to use dynamite to kill the giant White Worm while it is inside the pit.
In the final scene, Adam Salton, Mimi Watford, and Nathaniel de Salis confront Arabella and Edgar Caswall. A thunderstorm and lightning destroy Diana's Grove by igniting the dynamite.

Question: Where does the White Worm live?
Answer: In a giant pit inside of Arabella's house.
Alternative answer: in a pit in Arabella's house in Diana's Grove