Jacob Lewis
Ye Olde GM
[MENTION=82106]AbdulAlhazred[/MENTION] and [MENTION=1125]Tonguez[/MENTION] Both of you suggested some excellent ideas! It goes to show there is more than one way to design these. I certainly could have elaborated mine for such an epic event, but probably not at the time. It was our first skill challenge with a lot of new players, and we were (or I was) still figuring out the best way to execute it within a PbP format. If I were designing a similar scenario today with more time, I'd most likely develop something more complex along the lines suggested. 
The towns folk did not occupy the battle map, only in the abstract "theater of the mind". This was simulated by a combination of narrative description from myself as well as the players, and imposing a -2 penalty for all ranged and area attacks until the challenge was completed. The latter expressed the characters' intentions not to harm innocent people caught in the middle of a battle. Getting the people out of the area would clear up the battlefield and remove the penalty.
Thinking now, I could have allowed the players an option to ignore the penalty at the risk of hitting towns people by accident. But it wasn't that kind of campaign and they were not that kind of players. And it never came up.
Another consequence, the party would not be able to take a short rest until the people were safe, and another battle was imminent. In 4e, a short rest meant recharging your encounter powers and spending healing surges to regain hit points. But an army of goblins running through town would frighten a lot of folks who would look to others for protection. So regardless of the characters intentions, if towns folk were trying to get out safely and spot the one band of heroes fighting goblins huddled together trying to catch their breath, they might plead/pester them for help.
As far as holding the square, this was just a narrative way of saying "I got this huge, cool map of a town square that I'd like to use for at least the next few encounters." I did all of the battlemap updates on my computer with a paint program using tools, layers, and custom tokens. I had a lot more time on my hands back then.

Hmm... I thought I had a simple answer for this, but after giving it some thought, I realize there was a lot more going on.so last question - what was the follow up consequence of getting the towns folk out and holding the square against the goblins?
The towns folk did not occupy the battle map, only in the abstract "theater of the mind". This was simulated by a combination of narrative description from myself as well as the players, and imposing a -2 penalty for all ranged and area attacks until the challenge was completed. The latter expressed the characters' intentions not to harm innocent people caught in the middle of a battle. Getting the people out of the area would clear up the battlefield and remove the penalty.
Thinking now, I could have allowed the players an option to ignore the penalty at the risk of hitting towns people by accident. But it wasn't that kind of campaign and they were not that kind of players. And it never came up.
Another consequence, the party would not be able to take a short rest until the people were safe, and another battle was imminent. In 4e, a short rest meant recharging your encounter powers and spending healing surges to regain hit points. But an army of goblins running through town would frighten a lot of folks who would look to others for protection. So regardless of the characters intentions, if towns folk were trying to get out safely and spot the one band of heroes fighting goblins huddled together trying to catch their breath, they might plead/pester them for help.
As far as holding the square, this was just a narrative way of saying "I got this huge, cool map of a town square that I'd like to use for at least the next few encounters." I did all of the battlemap updates on my computer with a paint program using tools, layers, and custom tokens. I had a lot more time on my hands back then.
