Graboids are the result of horrible mutation of worms brought from earth to improve the soil quality on Calydon. Graboids are known to sparsely populate the Vast Deferens, and they tend to avoid standing water, so they stay east of Blackwater Lake and the river that feeds it. Occasionally a graboid finds a way under the river and becomes stuck in the Dustbowl to the west, where it frantically searches for any kind of food it can devour before it starves. Rarely some can be spotted further to the south, but there generally isn't enough food outside of the Vast Deferens to support their lifestyle.
They sense their prey by detecting vibrations in the ground, so they prey on Amarok, Baku, Behemoth, Cadmean Vixen, Cerynitis, Inosasao, and Muesli. They are much less likely to find the tree-dwelling Capalus or Megatherium.
See wikipedia entries for graboids, sandworms, and the Mongolian death worm.