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I would recommend treating for a fungus. A general fungicide would be all you would need to do this.

You can cut it back by a third but no more, as this would damage the plant. This article will help you: https://www.gardeningknowhow.com/ornamental/flowers/camellia/pruning-camellias-how-to-prune-a-camellia-plant.htm

It sounds like what you have may be woolly aphids, rather than a fungus. Try using a pesticide. This article will explain more about woolly aphids:
https://www.gardeningknowhow.com/plant-problems/pests/insects/woolly-aphid-control.htm

You do not need to pick up any of it. Just add some additional amendments to balance the soil. This article will help with that: https://www.gardeningknowhow.com/garden-how-to/soil-fertilizers/raise-acid-level-soil.htm

If newly planted, it could be from air pockets in the soil which are making it difficult for the plant to take up water. This can be remedied by tamping down around the base of the plant and flushing with water to fill the air pockets in. Up your watering as well.

It could also be due to a fungus. Treat the plant with fungicide to be safe.

It sounds like a a fungus, perhaps a tip blight of some kind.

Treat the plant with a fungicide and that should clear it up.