Let me give you a Rundown of Chapter 2 after Valorie joins the party.
1) Go into the silent forest and get the crystal to the east.
2) Go south in the silent forest until you see a temple.
3) Go into the fay forest and complete the story there.
4) Go to the mansion.
5) Lillith's Lair is in the West Beach. Take it down.
a. Bonus but helpful: free everyone inside the place after taking down Lillith.
6) Go to the camp east of the volcano.
7) Talk to Commander Blaze. She is awesome.
8) Go to the Volcano.
9) Talk to the governor in Lakeview.
10) Finish what the Goddess has for you.
11) Get onto the boat and sail to chapter 3.