I killed a chicken then got attacked by villagers. I sheathed my weapon and thought I could pay a fine. They kept fighting. I ran away and they stopped, but I still had business in the town so I went back. Of course then I got killed. What do I do about this in the future?
Sheating only works with guards I think. You probably have a fine to pay. Maybe try and find a guard of the same reach where you killed the chicken, pay the fine, and then it should be okay. Not sure though...
Or load a previous save.