Coldburn
Anyway, from the above arguments I, yet again, have to stress out that Law and Chaos don't mean lawful and unlawful, respectively, behaviour.
Ah huh.
A Lawful Good character might attack the corrupt Watchman who is molesting a woman in a shady ally.
The "corrupt" part demonstrates the Watchman is no longer upholding the law, but his own perverse interests. Hence, defending the woman is actually lawful. Also, protecting the woman is good. Hence, the paladin is being LAWFUL GOOD in this situation.
A Chaotic Good character might shrug, as it's not his fight and will hope the Watchman sees the error of his ways.
Except, that this is not a Good character but a neutral or evil character. A Good character will defend innocent people.
What you are all confusing is that the Paladin Code is similar to Lawful Good, which is not at all. As long as this mistake remains, questions like these will arise. It's perfectly fine, bar Dogma, to kick freaking ass as a Lawful Good character, in the middle of the streets, take the booze and the women, and kill anyone who does evil on the spot.
That is not lawful behavior, that is chaotic evil behavior.
The big problem is that most people don't sit down to consider some big issues before playing paladins or discussing alignment.
First big issue missed: What do the words in my alignment mean?
Good/Evil is the crux of the morality debate. It is a hard cored rule though in the DnD universe, there is no shade of gray. Good morals are good, evil ones are evil. Drow, kobolds etc are naturally born evil and the exceptions are something akin to a miracle because a god/goddess chose to let them live. Murder is evil, charity is good, work is good, sloth is evil. Seven deadly sins==evils.
Lawful/Choatic is the basis of ethics. Lying is unethical when done to gain personal advantage, upholding the law of the land provided it is just is ethical, defending your personal honor from slights is ethical, avoiding slights to your honor, or the honor of your god is unethical if these slights have the ability to seriously taint your or your god's reputation in the eyes of people.
Second people forget paladins are both lawful and good. Far too often people play them as one or the other and forget to really stop and look at both aspects of their alignment coupled with their dogma.
Paladins tend to duel. Because they are the strong arm of their church, if evil is running amuck, mocking their faith, bullying innocent people--they'll face the evil. They're far less likely to gang up and beat evil to a pulp in an unfair fight, or a fight in the streets that can harm innocent people, but quite likely to either challenge a foe to a duel or strike him down in the process of committing an evil act.
Paladins that refuse to defend their honor, or hide like baby cowards because their player doesn't think might defends the right need to pick up a copy of The Once and Future King. The paladin class is based on legends of King Arthur and Charlemagne--many of those legends involve knights dying in what appeared to be senseless duels against evil foes who were far stronger for no better reason than because they had been insulted.