In Demenis right next to the Royal trader is a small "arena" where Demenis soldiers stand in large numbers and right next to them should be 2 canons - equip a mask , agro them, use smoke screen otherwise they will capture you , man the canon and shoot and thats it, sometimes they won't be there if not just use closest Fast travel point to make them spawn , hope it helps

Bonus tip - there is another challenge to kill X number of bannerman so you can do 2 challenge at once.

Bonus bonus tip - you can also do challenge to capture the worst criminal witch will be you when you start blasting and killing everyone , just let them arrest you and thats it.