Tough encounters and Boss battles..

[hal200172]

This strategy always works for me. If you are having a hard time with a challenging encounter or an optional quest boss/story line boss, all you have to do is go into town and pay the priestess to be blessed by the 8 Gods (assuming that you have enough gold to pay for it). This should give you that needed boost to get the upper hand in dealing with these tough opponents. (Note: this is not going to help you with any encounters that are labeled as Dangerous (or something to that effect)).
For these you just have to level up to the point that they change to balanced (or something similar).