When you selected an area for the creatures for him to kill, there must have been something in that area that was not one of your dwarves, but was a member of your civilization. A trader or diplomat or something perhaps. He attacked it along with the goblins, and as a result became an enemy of your civilization. Now he's attacking other dwarves and creatures belonging to your fortress. When they fight him in self-defense, they also become enemies of your civilization. This will continue until every dwarf is fighting every other dwarf, followed by the loss of your fortress as everyone dies or goes insane.
There's actually a bit more going on than that, which makes it a bit more interesting:
1. Your dwarves are members of both your home Civilization and your local Group.
2. Caravan members and liaisons are only members of the home Civilization (they belong to a different Group).
3. If your dwarf attacks a member of the caravan, he becomes an enemy of the Civilization (for attacking a fellow member of the Civilization) but remains a member of the local Group.
4. If said dwarf then encounters other members of your fortress, they will perceive him as hostile (because he's an enemy of the Civilization) and attack him (or run away, for civilians), making them enemies of the local Group (for attacking a fellow member of the local Group) but remain a member of the Civilization.
5. Steps 3 and 4 repeat ad nauseum until you have 3 factions: enemies of the Civilization (but members of the Group), enemies of the Group (but members of the Civilization), and proper members of the Civilization+Group. Members of the first faction are all friendly to each other, as are members of the second faction, but if they run into each other they will be hostile. This behavior actually dates all the way back to the 2D versions, where Toady called it the "civil war bug".
If the 3rd faction can be isolated until all members of the 1st and 2nd factions are dead, then the fortress can be revived - this was actually accomplished in the community fortress "Failcannon".
Sometimes, a 4th faction of enemies of the Civilization
and Group will emerge, but the exact mechanics of this are unknown - this also happened in Failcannon.