I hadn't really thought about it, as my campaign is historical (albeit with elves and spells), so I have a fairly good handle on what should be happening. But when I do pause to consider, there is an important non-historical conflict happening, and yes, it does affect the common people. After all, in a medieval mileau, most people are rurally-based (80-90%); a hostile force will attack farms and pillage peasants, and as a result the scattered, ill-defended peasants will get very scared, probably head to a safer place like a city, and thus screw the local economy out of food. It's a fairly easy conclusion that war = bad for just about everyone.