Lorius and his clerics verse Maskdwarf and cultist will end up being a religious war. The Old Dwarven Gods, which are pro-dwarven science and anti-magic verse the Demons/True Gods, which are pro-magic. And of course it the current politics might affect what they will do since I doubt either side wants the destruction of Steelhold.
Okay. It would help if you established a few things about your character:
1. Does he have a following? If so, how large, and where do they meet?
2. Where did this following come from in a fortress of criminals?
3. What actions are they able/willing to take against the cult?
4. How are they going to protect themselves if the cult retaliates?
1 and 2) Basically any magic fearing dwarves that are enticed by the a cool and collected leader who offers a return to the old gods and the old ways without this scary magic which is beyond their control (Scared people will follow someone who looks like they'll protect them). Where they'll meet? In a reasonable large room with pillars and engravings, like the temples in adventure modes.
3) Generally whatever major actions the current leader Emdief allows, but whatever major actions Rhaken (Lorius' boss) allows in the future. Will always resort to insults and aggressive behaviour. The more devoted members of the clerics may get into fist fights with the more devoted members of the cult. Won't endanger the fortress unless the cultist are already endangering it, in which case, they'll just go all out on the cult.
4) If the cult retaliates, its war. Probably a crusade by the clerics to purge Steelhold of the heretics.
In short, a sort of following of scared and magic fearing dwarves who see Lorius as a way out of fearing these magic users and the cult. They'll gather in a temple. They'll generally act like a rival gang, but won't back down as some of the members will be generally devoted. If the cult retaliates other than insults or shunning, they'll blow it out of proportion and go to war with the Maskdwarf and his cult.
Hopes that answers your questions.