Superficially, I beat the DM because this is nothing more than a blind-choice alignment trap. I could pick either side to support for whatever reasons and still be dead wrong. I pick the villagers and ha ha now I'm an evil, murdering outlaw too. I pick the soldiers and fool that I am have joined the ranks of the evil oppressor and his willing lackeys. Take no side and I have no heart, no sympathy, no honor. The situation reeks of the DM trying to play Whack-a-mole with the PC's.
On another level there is insufficient data for a meaningful response. What do I already know about the town and its history? What rumors have I heard lately, if any? What class and alignment is my character and fellow party members? Is this in a dark alley or the steps of Town Hall? Are there any bystanders and are they watching, fleeing, or joining with/against one side or the other? Is anyone carrying holy symbols of deities? What are they saying to each other? What are the villagers armed WITH?
Of course, if I do nothing at all and simply wait for the situation to play out the DM will realize that I'm not biting and unless he intended for me to just watch while he played the game by himself he will HAVE to start providing me with more information to provide me with motivation to get involved - which he should have done in the first place instead of me having to PRY something resembling motivation out of him.