Early on in the game your party are extremely weak. They are just prisoners without any real equipment. Your party will also be underleveled for many fights for a while. As dull as it sounds, you'll have to avoid combat in general, at least for a while, and gain experience by simply exploring or doing quests that don't require (much) combat.
Based on your description of the situation, you are clearly underleveled. That particular area/fight, while not extremely tough, is not meant to be super easy, either.
In general: combat power and gear quality scale with level. If you're not used to the game yet, don't fight any fight in which the enemies are higher level than you. Even one level can make a big difference. Especially fights against guards. Even on the same level, chances are they have much better equipment than you do.
Last edited by Try2Handing; 04/10/19 08:07 PM.