Who knows, maybe we'll make this an option when the player creates his/her city.
You have to kill all enemy forces to win an army battle, and lose all to lose. And if you lose, you lose.
If you lose something during a homecity defense, I guess it'd be all lost. If you lose your town hall...you lose your town hall. Gg.
Disclaimer: This is a 'maybe I dunno' post and is not official endorsed by Reverie World Studios