The existence of the resident witch in Murky Waters can depend on one of the very first difficult choices Geralt faces in the course of the game.
This is the "old woman" healer. She provides for the magical and healing needs of the village of Murky Waters. She also buys and sells a number of things, including: ingredients and alcohol. She also pays for valuable (non-alchemical) monster parts and dispenses information valuable to the plot. She will buy:
Much earlier in the game, in the Outskirts, Geralt meets Abigail, the local witch. Her relationship with the residents of the Outskirts is rocky, to say the least. Geralt must decide whether to help her or leave her to the villagers at the end of the chapter. His choice determines whether or not you meet the healer described above, or run into Abigail for a second time.