Mulus leaves the village before the evils god temptation and allegedly returns to her own village.
However, her village gets bum-rushed by one of the evil gods and she is the only survivor that they know about. ( there are hints that some might have escaped but none are found )
Mulus comes from a village of elves worshipping the god of medicine, and while not an enemy of the god of fate they follow different chief gods and are suspicious about them.
Mulus later tells the villagers that they were afraid they were spies or bandits, but because of the attack she never really got any further orders then to investigate them.
They were never really hostile, only suspicious of strangers.
Also, you might have noticed I called Mulus a she, Mulus is, in fact, a woman, but she disguises herself as a man for a few reasons.
The biggest one being that woman travelling alone is much more likely to be attacked and is much more suspicious in general.
So everyone in the village belives she is a man and yes, she is indeed an elf