One-Eyed Willy is the boss monster in Plunder Cove, a side quest dungeon in the Temple Steppes.
During Act I of Torchlight II, the player is offered the quest Ghosts of Plunder Cove, which involves entering the dungeon and destroying One-Eyed Willy, an undead pirate captain, who resides on his ship with his equally undead crew. One can always find his other eye somewhere in the Cove. (EDIT: where? Was not able to find one. There is definitely a small percent chance that the captain will drop the eye upon death. The statement that there is "always" the eye is possibly a mistake.).
His name, along with the corpse that contains his other eye, is a reference to the pirate of the same name in the movie The Goonies.