I'm using the mod know as "Deadly dragons" Wich makes the fight against the dragon much more tough, and adds a number of powerful dragons along side it too. One of the features that this mod adds is the ability to let other NPCs run in fear if they are not essential when they see a dragon, and it just so happened that the dragon attacked markath.

While i fought the dragon i could hear people running in fear, the dragon couldn't land properly since the city had almost no space, thus being forced to fly around and land on rooftops to breath at me. When he was low on HP he force landed near the mine, and the workers ran in panic inside the mine, when the dragon died, funnily enough one of the workers came up to the dead dragon and started too... touch it, like it was sorry that it died o.o.

Anyways the dragon died and the WHOLE city, came to the mine to see the dead dragon, kind like what real people would do if something like this ever happned. really added a flavor to the whole "roleplaying" issue.

Sounds sweet, too bad no mods for console