As I was trying to pass time between major summer events (just finished Horga'hn Hunt with 10 min to spare), I talked to the Arenologist and started the Castles in the Sands mission. I built the keep, then the quest disappeared. I waited for the mission to fail, seeing if the timer was still running, it was. Restarted the quest, built the keep, chased off a monkey, quest disappeared again. Timed out and restarted it again.
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Each castle you build extends your castle-building ability and as you keep building castles, you can build them bigger and fancier.
You must turn in the mission to develop your sand-castle-building experience.