Also, after the Governor and his men killed the soldiers, when they showed up back in Woodbury (with a truck, humvee and weapons and gear), the Governor made a little speech about how "They didn't have our walls, and so the biters got to them before we could." That reinforces (for the townspeople) the idea that Woodbury is the only safe place, and they'd do best to stay in line.
ETA: "Biters" is actually a better term than "walkers". I love how, since the word "zombie" doesn't exist in the popular culture of the "Walking Dead" world, each little group has its own name for the corpses that keep moving around.
ETA some more: I thought Merle didn't look any too happy with what they were doing (killing the group of soldiers). He's loyal to the Governor, but he's also ex-military, and, as Daryl said, "the toughest sonofabitch I ever met." If he decides to go against the Governor, things might get ugly.