Land dreugh, unlike aquatic dreugh, are non-sentient. From http://www.uesp.net/wiki/Tamriel:Brenus_Astis%27_Journal:
...called "Billies" by many of the local farmers. But, is this so-called "land dreugh" actually of any relation to the sea-dwelling dreugh? There certainly seem to be similarities in morphology, especially in the region of the head and thorax. And they produce the same "dreugh wax" found in the aquatic creatures. However, while true dreugh are known to be cunning, even intelligent, these "land dreugh" demonstrate none of the same intelligence. They are violent and aggressive, killing indiscriminately.
Some believe them to be of Daedric origins, perhaps related to the Spider Daedra. That, however, is not the opinion of this researcher. It appears more likely that the "land dreugh" are a distant relative of the true dreugh, perhaps an ancestor from far back on the evolutionary timeline....
What that Imperial didn't know, Sotha Sil did: that part of the lifecycle of dreugh is karvinasim, in which they live upon the land for a year, and which involves profound physical transformation as they change from aquatic to terrestrial and back again. From http://www.imperial-library.info/obbooks/2920.shtml#2:
He pulled a small fibrous ball, about a foot in diameter from his white robes.
"What is this?"
The students understood this test. It asked them to cast a spell of identification on the mysterious object. Each initiate closed his or her eyes and imagined the ball in the realm of the universal Truth. Its energy had a unique resonance as all physical and spiritual matter does, a negative aspect, a duplicate version, relative paths, true meaning, a song in the cosmos, a texture in the fabric of space, a facet of being that has always existed and always will exist.
"A ball," said a young Nord named Welleg, which brought giggles from some of the younger initiates, but a frown from most, including Sotha Sil.
"If you must be stupid, at least be amusing," growled the sorcerer, and then looked at a young, dark-haired Altmer lass who looked confused. "Lilatha, do you know?"
"It's grom," said Lilatha, uncertainly. "What the dreugh meff after they've k-k-kr-krevinasim."
"Karvinasim, but very good, nonetheless," said Sotha Sil. "Now, tell me, what does that mean?"
"I don't know," admitted Lilatha. The rest of the students also shook their heads.
"There are layers to understanding all things," said Sotha Sil. "The common man looks at an object and fits it into a place in his way of thinking. Those skilled in the Old Ways, in the way of the Psijic, in Mysticism, can see an object and identify it by its proper role. But one more layer is needed to be peeled back to achieve understanding. You must identify the object by its role and its truth and interpret that meaning. In this case, this ball is indeed grom, which is a substance created by the dreugh, an underwater race in the north and western parts of the continent. For one year of their life, they undergo karvinasim when they walk upon the land. Following that, they return to the water and meff, or devour the skin and organs they needed for land-dwelling. Then they vomit it up into little balls like this. Grom. Dreugh vomit."
The students looked at the ball a little queasily. Sotha Sil always loved this lesson.