On a pure ROleplay concern, it should not respawn ... I mean "hey guys, I killed everyone here, do you want to come at the same place ? "
In your playing time, saying one year (in the game, and i'm unsure of it), Some wolf shall come back, but no goblins ... or humans (1 year is not enough to make people come back in town, I think)
Well on the other hand, if you wasted 10 bandits, 10 other bandits could take their place. Not within seconds, but after e reasonable amount of in-game time it is feasable since the area has potential work for them now the compentition "left".
But respawning should be very minimal IMHO, perhaps for some wild life its okay, but not for human(oid)s.
