I let the people in the grove kill that goblin that was prisoner. I have the game on the easy setting for my first play through, so it isn't that hard for me. It still has some challenge to it though because I am not very familiar with the spells and everything else you can do.
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Ah.., mine is on Balanced, and you have to play it right or get hammered. The goblin in the grove, that's not played out yet.