I think the title of the thread says it all. These are really two questions.
"Does evil mean Evil"?: as we've seen in this thread (and others) some DMs see evil as a political party (eg "in my campaign 1/3 of the population is evil). If this is the case, the answer would have to be "no."
However, I don't think it should be this way. In a system where evil is as black-and-white as in D&D, evil people/creatures should USUALLY be doing or planning something evil... that's what they are, after all. I don't think that you should have a bunch of NPCs who are hard-working, honest peasants who happen to be evil.
"Is a paladin free to act against evil?" Of course!!!! within the constraints of law...
Now your hypothetical question is well (and cleverly) put, as fantasy world forests are often outside the boundaries of any authority.
The second situation should be easier (orc, giant, etc), for these creatures are 1-likely to be doing something villanous, 2- likely to attack the paladin on sight, and 3- USUALLY inherently evil... in most cases my answer would be 'smite away!"
If its a human/demihuman, then my answer would depend on the definition of evil in the campaign. Also, I agree with previous posters who have said that paladins should only detect evil if they suspect something. It seems to me that it would be somehow ... disrespectful... to submit someone to that kind of scrutiny agains their will (and therefore neither lawful nor good, no?)
But enough analysis... I have played at least 4 or 5 paladins in my 24 years in the hobby, and for all of them, the answer would have been "no". Unless it is a fiend, evil dragon, etc.
"Does evil mean Evil"?: as we've seen in this thread (and others) some DMs see evil as a political party (eg "in my campaign 1/3 of the population is evil). If this is the case, the answer would have to be "no."
However, I don't think it should be this way. In a system where evil is as black-and-white as in D&D, evil people/creatures should USUALLY be doing or planning something evil... that's what they are, after all. I don't think that you should have a bunch of NPCs who are hard-working, honest peasants who happen to be evil.
"Is a paladin free to act against evil?" Of course!!!! within the constraints of law...

The second situation should be easier (orc, giant, etc), for these creatures are 1-likely to be doing something villanous, 2- likely to attack the paladin on sight, and 3- USUALLY inherently evil... in most cases my answer would be 'smite away!"
If its a human/demihuman, then my answer would depend on the definition of evil in the campaign. Also, I agree with previous posters who have said that paladins should only detect evil if they suspect something. It seems to me that it would be somehow ... disrespectful... to submit someone to that kind of scrutiny agains their will (and therefore neither lawful nor good, no?)
But enough analysis... I have played at least 4 or 5 paladins in my 24 years in the hobby, and for all of them, the answer would have been "no". Unless it is a fiend, evil dragon, etc.