Had an issue similar to what temp5 experienced. People in the second village were gone but reappeared south after I destroyed the two gates west and east. By the way, they were pretty hard, had to spam Q and E. Wish there was an easy way to switch between sword and bow.
Edit: Finished it, pretty smooth although the final boss was tough and withdrawing regenerates the gate.
edit2: and replaying it I can give a hint. To start out strong you need to:
1. Get good rewards from those two mission givers in first city, it's random so save first and if it's not so good exit and try again. I got a Quickstrike Blade (essential along with the bash talent) and a Cold Steel Plate (old guy's second reward, first is modest), and there's the drop of Bloodbones too (Lightning Legplates).
2. Hunt skeletons, as you attack a gate, skeletons will come out a few times, if you go to a different square its health will reset, so you can take out as many skeletons as you want just as long as the gates aren't destroyed. Bloodbones spawns 2 skeletons too.