Any druid can challenge Faldorn in BG2. You also become the Great Druid at the end of the stronghold quest - way beyond an Archdruid.

And they could have just thrown Goblin after Goblin at him until his Spell Slots are gone. If he even was at full strength when the fight happened.
It could also be done by a surprise sneak attack, pulver or gas trap to knock him out. The biggest trouble is his shapeshifting and not his spells. But I assume you can actually deal with a lot of enemies he could transform.

Also, I never got the feeling that this was an overly important grove. I might have missed something, but where is that implied?
I just saw it as a small grove that has become a refuge because of its location and defensibility.



In fact, your post reminded me of a problem with druids:
Many of their spells influence nature, so it is completly resonable that he did not use them, since he thought the harm to nature is greater than the benefit. Druids are not nature themed mages, they are wardens of nature given power over it. That allows them to really harm nature.
Though he would be justified if he knew that they are all tadpole infected. Aberration invasion is big enough of a threat to pull out everything.