I mean, are they really just murderously paranoid and a tad too wary of outsiders? I've done the quest to kill 14 villagers a few times and I thought the quest text hinted at something a bit more sinister so I went through every house looking for demonic altars, maybe a pile of dismembered corpses in a cellar somewhere, but nothing. Granted, they've got the stealthed bandits lurking around and yes, they do apparently kill the odd soldier, but apart from that they seem to be a quiet fishing community of various races, living together peacefully... so what am I missing?