Average peasant has 4 hp. Max average strike of a dagger does 4 damage. Even if it doesn't strike a vital area, if you get a full, solid, clean hit with that blade, they dead.

If you crit, i.e. hit a vital spot. They definitely dead and the 8inch blade might even take out a tougher boy.

Damage is supposed to imply how effective the strike is on a hit. A 1 is a decent slice or puncture. Possible stitches, not guaranteed. 2 damage? That's a good shank. Stitches recommended, gonna need some medical attention, picture getting stabbed in the hand or getting a slice across the arm or leg. 3 damage? That person is WOUNDED they won't keep fighting if it isn't life or death picture a meaty stab to the bicep or shoulder or side, nowhere critical, but you know you can't take another hit. And 4 is death.