I had a similar problem when I first landed in the Freedom Islands. EVERYTHING was too strong for me. What do you do? You get back on the ship, go and clear out everything on Darion first. There are a handful of fights that are still too hard. If you upgrade your Scouting skill you will be able to tell which fights you must avoid.
I've found that you can achieve a lot by sneaking past enemies, picking up the goodies, and then running away.
