Fort Moonwatch is a location added by Wyrmstooth. It is an imperial fort built more recently than Fort Valus further south of the island. Its location near the docks and the Imperial Mining Settlement make it more of an ideal of a location for defending the mining operation at Wyrmstooth than Fort Valus, the latter having subsequently been abandoned by the empire.
When the Dragonborn arrives on Wyrmstooth for the first time, the fort will be in the hands of bandits. Later once the dragon Vulthurkrah has been defeated, the empire will strengthen its presence on the island by reclaiming the fort which occurs once the settlement begins to rebuild.