On this first sweep of the towns, He-Walks-Alone is not killing people inside their homes; he waits for them to go out into the streets. The only interior location where he will kill people is inside a temple. On successive sweeps this rule will be reviewed, as total elimination might otherwise be impossible. He-Walks-Alone's method of choice is by donning the Cowl of Nocturnal and sniping the townspeople with the appropriately-named Arrows of Cleansing. The AoE fire spell of the aforementioned arrows has led to some amusing deaths. One temple priest even landed in the centre of the alter, like a hole-in-one.
Inspired by http://www.gamesas.com/index.php?/topic/1138578-what-should-i-do-now/page__view__findpost__p__16648411. Many thanks!
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See below for pictures!