The Battle of Claw Island - Incompletable
Try going near the dragon. This happened to me before too, so I ran towards the dragon until the new objective appeared.
I can confirm what Germmar said. Approaching the broken wall will move things along.
Yep. Approach the broken wall and the dragon should use his breath attack (that inflicts Fear on you). This triggers the next phase of the story.
Note that the dragon’s breath has a cooldown, and he uses it immediately after when he first breaks the wall. So if you are near the wall and he’s not using it, hang around there for a while until it comes off cooldown and he’ll use it again.