Not in medieval ages, mate.
In any age there are going to be a number of coward, and it should always be based upon factors like NPC personality and player rep/appearance, player has no armour and a knife? sure the villagers gang up and fight back, player has full body armour, a long sword and shield? a couple of brave should hold the line while most run for their lives.
If we will read some historic books, we can understand that male villagers defended their own houses and families even versus outnumbered opponents. Village have no police, no militia, no garrison to let people walk unarmed. I agree that some villages can and should run, but - children, women and rarely seen cowards. Men should unite versus psychopath attacker. If you are attacking friend of villagers, you should predict that his friend will aid him.
All the time? in every situation? I have doubts about that.
I think its more likely that the stories of the "heroic" last stand where just remembered more fondly and told more often then the stories of "cowards" fleeing for their lives rather then the last stand actually being more common.
And, for more realism, some domestic animals should run away or take part in fight to defend their owners.
Some bonded animals? sure, as some horses can be vicious when defending their herd but all the non-bonded farm animal out in the paddock? no thanks.
But now it's lost adventurer mode, man. I really can not understand where are you finding fun to play it in recent versions. No fight, much useless talking, racing... Hardcore is always an option. Roguelike is a hardcore genre so it must be hardcore.
Because I'm not concerned with a challenge, I want to be able to play as a character in a world that seems reasonable and exists independent of player desires (once in game/post world gen), not have everyone be a brave fighter just so that there is a challenge to be had.
To the truth, quests of killing bandits are quite easy in DF, and only assaulting goblins is interesting alongside encounters in 31 and 34, when your party can be surrounded by large and well-armed squad. And when bandits can not even defend themselves, it leave me (and not me only) completely out of feeling what's going on.
Bandits, guards, militia and other adventurers should be braver and more combat ready then peasants on average, but even then there should still be some people whom run the moment it seem like they themselves might die.