Were they going to go on the offensive once their chips were down and the grove was sealed then? I don't think this is communicated to the player, nor does that sounds anything like Kagha's plan. Maybe the problem is that Olodan gets hardly any lines?
My interpretation is that they simply want the goblins to kill all of the refugees, who represent civilization to them (city folk basically). For Kagha, this might be an initiation rite into the shadow circle. Interestingly, this is similar to an example quoted in that handbook: shadow circle methods include allying with races considered "uncivilized", such as goblins, orcs or giants, as long it is against civilization.