This video shows off the three main ways that the player can direct their dwarves to engage in combat. The intent is to take minimal user input to give the automated dwarves the enough information on how to smartly engage enemies.
In the early game the player does not have a defensive structure and his workers are ranging out gather resources. In this case the player will likely order their dwarves to attack all monsters that come into the area in order to protect the workers.
Later in the game when the player has built a castle they will not want the dwarves to move to engage all monsters. Rather the player can assign posts on towers or behind doors and assign archer or melee squads to those posts. Then when monsters come to attack the castle the dwarves will already be in the best position to defend against the assault.