Termites nesting in trees stumps and in cavities

Many species of termites live in and eat trees.
It stands to reason of course, termites eat timber, so trees are pretty fair game. Termites however do not eat live timber. The only parts of trees that termites eat are the heartwood which is already dead, (and the heartwood may in fact be contained in a very large area of the internals of the tree not just the trunk but also the branches and roots) and large areas of bark on the outer layers of the trunk which are probably ready to be shed by the tree.
The photo of a tree trunk here has a large deposit of a tan coloured substance in the centre. The substance is in fact a mixture of termite faeces and soil from the area around the tree that termites have put in place around a wounded area of the tree which of course was dead wood. Once the termites had covered the dead wood over they then ate it. This type of "mudding" found on the exterior of a tree is often indicative that a termite nest exists inside.
Once termites have eaten a portion of a trees' heartwood there will be a cavity left. A cavity inside a tree is a very suitable place for termites to nest as there are few predators that have access to it, there is only a short distance to a food source which is probably increasing in size, and if the termites use their heads they will be able tap into the trees moisture gathering abilities and really make life easy.