What do termiites actually do? I bought one from Morgo's Termite Farm just out of curiosity and he said he'd have it delivered. I've just found the delivery man outside the Mage Tower and he just asks for directions to Gidolan Keep. How do I get my termite?

You don't get a termite, the guy is just there to be funny.

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"It's better to keep your mouth shut and appear stupid than to open it and remove all doubt."
--Mark Twain

In that case, what's the point of buying a termite? Why is there a termite farm and a delivery man if it doesn't do anything?

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Ask him.

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We tend to become like the worst in those we oppose.
-Bene Gesserit Coda