SPOILERS, i suppose.

I actually tried befriending the goblins, but in this game they genuinely make them truly evil and despicable in every way. It honestly sticks out like a sore thumb. Burning down what is basically a church to the god of Hosting (one of the more primeval sins), eating people, bullying, slavery, lying, cheating, etc..

It's honestly kind of weird because even Devils have some nuance in these games and there was some attempt to make goblins just genetically predisposed towards sadism and evil.

you can ally with the goblin camp, thats what i did. if you go to the jail in the tiefling camp you can find a goblin in a cage who will take you back to the camp and let you join them (and then you can do the 'evil' run, which is great fun (AND you get minthara my beloved))

You could just leave IIRC. You’re probably gonna get into combat with goblins, but you can also toggle to non-lethal attacks.