The card says that "if a character defests another character, he must choose to TAKE a life as his reward".

Does this mean the winning character gains a life or is it just the losing character losing a life?

Typically when someone attacks another character they have a choice of taking a life, stealing a item etc. With the Howl of the Wendigo it is simply saying that you no longer have a choice to your reward for beating the player, you must force the loser to remove a life and you don't have any other options or rewards.

The card says that "if a character defests another character, he must choose to TAKE a life as his reward".

Does this mean the winning character gains a life or is it just the losing character losing a life?

There are lots of cards that say "choose to take a life". This is a slightly imprecise wording mostly used in the Frostmarch expansion, while the base game Rulebook says "force to lose a life" and base game cards say "cause him to lose a life".

But the Warlock Quest that you receive if you roll a 1 at the Warlock's cave (or draw the corresponding Warlock Quest Card) uses the wording "take 1 life from another character". This is a very old Talisman wording used since 2nd edition (probably since 1st edition, but I'm not sure).

However, this has been used in so many cards now that there's no doubt about its meaning.

It means exactly the same as "force to lose a life".