The Octopus King has 380 HP and attacks melee. (16 Damage)
After killing him, he will drop crown, which you can enchant twice. One with Obsidian, and the other with Jaspers.
You can see him in The Cave Entrance however he randomly appears. Fighting the Octopus King is optional and normally you see him a few times through the cave. The general strategy for beating him is using the Troll's Bludgeon and 2-3 health potions. Alternatively, you can use the Pogo Stick and the Feather to jump over him, and then use the Pink Enchanted Gloves or some Health Potions to regenerate health while jumping.
Farming him is a very good idea as he gives 4000 candy a pop.
Here is an odd fact, part of the octopus king is green. (If you angle your device correctly).