The easiest way to do a large battle between two groups of NPCs is to use the AI commands. Let's use an example of a bunch of imperial legionnaires, with whom the PC is aligned, versus a dark brotherhood gang. First set the 'fight' rating ( in the AI tab) of the DB NPCs to 100 so that they'll attack the PC on sight. Then, you'll need to set the AI of the legionnaires to:
AIFollow player 0 0 0 0
You can do this either with scripts attached to the legion NPCs or with an external script. The default behavior of AIFollow is to attack whatever is attacking the person they are following. So when the DB guys attack the PC, all the legionnaires will freak out and starting attacking them back. Presto instant giant melee.
I use a variation on this in the GIANTS mod to convince the guards to attack monsters that are actually NPCs ( vampires, shades, giants, gorgos, etc ).
