It's actually quite simple. After you've done the quest concerning
you can go to the camp, where bandits will sit around fires and walk around. Walk up to them and use the follow expression, on all of them, most should follow, and walk to a trader camp, be it Darkwood or Barrow Fields. Punch someone who isn't a bandit in the face, and guards n' stuff will attack you. The bandits following should start fighting. You've started a miniature war! After all of that, tell the bandits to wait, and you'll have a dead trader camp full of bandits. Not really useful for anything, just fun to do.
Do not teleport while they follow you. They will disappear and respawn at their camp.
Sounds cool. An alternative, if you're playing Fable on the computer, is to just spawn a bunch of bandits in any town you want, and go smack the local guard with your weapon of choice. 
