The simplest way for me is to create a mod with Art Manager, in "source" create a folder named "Text_XX" where XX is your language (if the language is not translated in the vanilla game like Vietnamese, then I think any name can do).
Then select all .txt files in Art Manager, right-click, auto-create asset. Validate every single one, and build your mod. In your build directory (usually My Games\Titan Quest - Immortal Throne\custommaps) you'll find an archive of your texts.
When you need to update a .txt, just rebuild your mod after, you'll get an updated .arc easily.
There are other tools that can build directly a .arc from source files, but I find them clunky to use.
Here's an example
(https://i.imgur.com/qXVV9rm.png)