To Xaltotun, grand fakir of Nemedia: Dog of Acheron, I am returning to my kingdom, and I mean to hang your hide on a bramble.
I had a look through the REH stories for other uses of the term, and found this in "Beyond the Black River":
Who can be sure that all the inhabitants of that black country are natural? Zogar Sag - a sage of the eastern cities would sneer at his primitive magic-making as the mummery of a fakir; yet he has driven mad and killed five men in a manner no man can explain.
This would seem to give the impression that a fakir was not a true sorcerer, or that it was some sort of "low-level" magic user looked down upon by the Sons of the East (who are greater than the Wizards of the West, according to Hadrathus). In this context, Conan is taunting Xaltotun's skills as nothing more than "the mummery of a fakir." "Grand Fakir" is then Conan saying Xaltotun is either the greatest Fakir of them all, or a puffed-up fakir with illusions of grandeur. It could be taken a number of ways, methinks.
Some discussion of the term is necessarily. Fakir, as I understand it, has become a common insult analogous to "beggar," and indeed, the modern Faqirs are among the most marginalized Muslims in all of India. Howard's usage could have just been used in this sense. However, faqirs are also holy men who are bereft of worldly possessions. Xaltotun, too, is without his most important possession in the Heart of Ahriman. The most powerful artifact of the age and one of the things Xaltotun needs to have. Conan is effectively taunting Xaltotun about this, from that frame of mind - but Xaltotun didn't know that the Heart was gone. There's another: fakirs are homeless. So is Xaltotun.
Xaltotun's Acheron is gone, and it clearly affected him:
Orastes unrolled before the stranger a map drawn cunningly on vellum.
Xaltotun regarded it, and then shook his head, baffled.
"The very outlines of the land are changed. It is like some familiar thing seen in a dream, fantastically distorted."
"Howbeit," answered Orastes, tracing with his forefinger, "here is Belverus, the capital of Nemedia, in which we now are. Here run the boundaries of the land of Nemedia. To the south and southeast are Ophir and Corinthia, to the east Brythunia, to the west Aquilonia."
"It is the map of a world I do not know," said Xaltotun softly, but Orastes did not miss the lurid fire of hate that flickered in his dark eyes.
The confusion at the geographic outlines, the distortion of the national territories initially baffle him. Then he realises Acheron is history, and the Hyborians rule over the ruins of the empire. That lurid flicker of hate: they destroyed my home, my people, my world. They will pay for this.
Steve Tompkins pointed out in The Lion's Den of The Cimmerian print journal that Xaltotun's motivations are rather sympathetic: he was a patriot whose entire world has fallen apart. And I agree. The world as he knew it was gone, and he could barely understand this new one. Dark and terrible as it was, he missed his home. All he wanted was to bring it back. The scary thing is, he could bring it back. Thus the plot of The Hour of the Dragon. If Xaltotun was the protagonist, this would be a mixture of the Revenge and Journey Home archetypes.
So for Conan to equate Xaltotun with a landless, possessionless beggar is kind of a triple-point score that could've hit pretty close to home, from that point of view. Did REH plan it this way? Who knows. I have an inkling he merely used it in the same terms as in "Beyond the Black River": a minor, insignificant mummer. Still, it's an interesting thing to ponder.