First thing's first. You'll need to charge one mostly Holy group to the east, to take care of all the enemies that arise from the graves to the south east. They're heading north, in an attempt to kill all the civilians.

Grove heads off to the graveyard to the north west, and it's impossible to catch him, really. Once he arrives there, he will mock you, and start summoning more Undead, starting off with the Living Armour and Wraith groups. It's handy to have another Holy unit following him, but not essential. The Living Armour heads west to attack the civilians, but will try and return later on.

Simply put, get a unit to the west quickly, and once those Undead are dealt with, return north-west to take care of Grove. Be careful - he has MP Drain and Thunderstorm. And remember, MP Drain may work ~against~ you if used on Undead...