Where do you get Groo the Game? Well, it's out of print as of early 2000. Maybe ebay?
Now I have been playing the above way forever.
However, I contacted the Archangel group a while ago and they told me that if you play the Fray card it not only destroys all the army cards at the attacked town's location but also at the attacker's village (unless it is a card that is immune to Wild Cards) so you have to be careful when you play it. I never liked that ruling but it's how we play it now.
This actually seems a little fairer to me, basically Groo kills all army cards at both locations, which is definitely in spirit with Groo!