That sounds like a bug.  I have never had a city defense where the militia didn't show up.  Do you have a save?

I have to chime in this thread, as getting a city of mine razed is the main reason why I reload the game (or plain stop playing). But I still think that there should be a heavy penalty from failing to defend a town. That made think that different enemy could give different penalties by taking your town. For instance, thieves could take half of your money and resource; intelligent monsters (ogres, darklings, etc...) could occupy the town as a lair and generate more monsters; wild animals would simply lead to some population loss from hunting; while rampaging monsters (dragons and elementals mainly) could have the aforementioned suggestions of destroying half of the buildings and population.

But there is something else about monster attacks I really dislike in this game: that the pretty much only attack when you have few chance of winning. I had a situation in my current game where two towns a short distance apart (could be traveled in one turn) got menaced at the same time by monster armies that I couldn't defeat in open battle, but that I could defeat while defending in my town. Even though I could cast Freeze on one of the army, the other wouldn't attack my defended town until Freeze ended and whichever town was undefended got razed. After much reloading, one of the army attacked the defended town and I was able to save both. While this reloading was definitely full of calcium, it made me wonder why do monsters care about how well towns are defended. They should either always attack, or never attack. And I would say that being regularly forced to defend your cities would make the players feel that their garrisons are useful.

No the AI shouldn't have to abide by the 5 turn rule since the human player can exploit it unlike the AI will exploit the human. This is a good BALANCE FEATURE of the game and I like it. Allow the monsters and even the other AI players to RAZE the human players holdings immediately.

Also seed any reloads from saves with the razing already done so players can't do the save/reload cheat. Someone has to finally make a game that players have to live by the RULES not the ability to save/reload over n over. It's time to bring back what gaming is all about.....playing by the rules not cheating your way to the end.

+1 to fix this.

It is a bug when in a middle game on casual normal diffilucty stone guardian comes from nowhere and destroys you capital in a turn.

right after this you gain +1 ragequitter.

Apart from whether it's an exploit or not, the practical problem of kiting giant monsters threatening your cities is

(1) Cost.  Ok ok, scouts are cheap, but in my experience on harder difficulties you really need a couple of dedicated "kiters" to protect your little empire in the early days, when even a Medium pack of wolves is too tough for your sovereign and can doom a city.  And in the early days, you don't have a lot of production so kiters are comparatively expensive.

(2) Micromanagement!  I don't know about you guys, but I really don't want to spend my turn carefully leading hordes of Ravenous Harridans in circles around vulnerable cities.  The very fact that you could contemplate custom designing a "kiter" class unit (as I am right now - no weapons or armor, ridiculous gaudy clothing, and a big beard) is absurd.  In fact, I'd rather just save the cost of the kiters, hit "enter" and hope for the best.

Again, I'm all for severe punishment in the event of losing a city, and there are a lot of fun suggestions in this thread on how to creatively be cruel to the player.  But as Alandragon wrote in another thread, at present the "punishment doesn't fit the crime."  Give me a 5-turn grace period, destroy half my buildings, turn my city into a horror-spawning lair, but please don't just destroy this city and settle-able spot FOR THE REST OF THE GAME.  

Why would you do that? Its a waste of moves that could be used to convert the monsters into delicious XP.

Now I think you are missing the point of the thread. The easiest way to handle late game monsters guarding settle spots you want is to settle then try to kite them away with weak units. It doesn't work very reliably but is viable. By definition we're talking about situations where you can't defeat the monster in a straight fight.

Personally I think kiting like this shouldn't work at all, monsters should immediately attack whatever disturbed them and if they win raze it (but with no salting of settle spot) and then go back to their lair. The same should happen if the AI disturbs monsters. This would eliminate the current problem of the AI griefing by settling dangerous settle spots and either getting away with it or destroying the settle spot when the town is destroyed.

I'm not joking when I say AI griefing with settling is the biggest thing ruining my enjoyment of the game because the only counter to it is to settle the dangerous spots early, before the AI does, and try to kite the monsters. It would be a much better game if you had to develop enough power to destroy the monster guarding it before you could safely make use of the settle spot.

It is mate, it is... you just need to find the way;). There is no "destroyed settle-able spot FOR THE REST OF THE GAME", as immauel1 put it.