The passages in the text doubtless refer only to defensive war. Buddhism generally got along well with other religions including those in India and East, Central and Southeast Asia. However, the situation with the Lalos was seen as different.
In particular, the level of violence used by these cultures was addressed.
As for the behavior of the Lalos, whatever country in the world they are in, they have asura (demonic) aspects or proclivities or are of that family, the party of Maara (God of Evil). Dwelling on having power and violent action, without kindness toward sentient beings is the Lalo form or way.
-- Kalacakra Tantra
The lack of compassion of the Lalos was seen particularly in their treatment of animals and in their diet which was described of consisting mostly of nearly raw, bloody meat.
The text describes a situation in which the Lalos conquer all the lands "south of the River Sita." Only Shambhala north of the river is spared although its borders are breached.
After the Kalacakra Tantra reached Tibet, that country had good and active relations with Shambhala despite the ongoing threat of the Lalos. Students and pilgrims are said to have traveled from Tibet to Shambhala, and maybe more importantly, also from Shambhala to Tibet, dispelling doubt that the former was simply a mythical kingdom.
However, only a few decades after the Kalacakra reaches Tibet, the mighty Samudera empire had established itself in insular Southeast Asia. Even a few centuries earlier the smaller Peureulak kingdom had arisen in the region of Aceh. Gradually, Shambhala becomes less of a reality and more of a myth as travel for Buddhist travelers becomes more difficult.
Despite the grim outlook, the text offers hope in the form of a future savior from Shambhala. In the view of the Dragon and Bird Clan, I submit, the cycles in the clan war witness a regular ebb and flow of fortunes with each major decline reversed by the arising of a dynamic clan king. In the great cycle, when in their view the final victory over the materialists must be achieved, a king of equal proportions must arise.
In the Hindu world, this king is known as Kalki who comes from the village of Sambhala on a white horse. In the Kalacakra it is Raudracakrin of Shambhala who also rides a white horse.
The horse may be linked with the Milky Ocean and also with the submarine fire in the shape of a mare's head found in Hindu belief. It would stand for the powers of the Earth, particularly the fiery volcanic energy found under the ocean and the world. In other words, this is the king connected with the great volcanic world mountain.
Such views also made their way into the beliefs of the Zoroastrians of India and Iran. The Bahman Yact speaks of the savior king Kai Bahrám Varjávand who comes from the "eastern quarter" in the direction of "Chinistan" (China) or Hind (South India and the East Indies). The king's exploits are mentioned in several Pahlavi and New Persian texts.
In the Shahnamah, the chronicles of the kings, Kai Khusraw, the eighth and last king in the Kayanian line, journeys to the mysterious subterranean fortess of Kang-Dêz in the East. To reach Kang-dez, he first must travel through Khotan and China before embarking on a seven month sea voyage to the paradisical fortress.
Like Shambhala, the actual directions to Kang-Dêz are somewhat obscured and maybe purposefully so. It is said to lie within the cosmic Mount Qaf, the axis mundi, where the three worlds -- the sky-world, the terrestrial-world and the underworld -- meet and provide access to one another. The inhabitants are classic "Happy Islanders" who live long, carefree and pious lives.
The great kings go to rest in Kang-Dêz to await the final age when the future Saoshyant comes to transform the world into a Golden Age. As with Shambhala, it is not entirely clear whether the final battle of "good" versus "evil" is fought on a spiritual or mundane level. Some say it occurs on both planes but mostly on the former.
The description of Kang-Dêz fits that of the classic mandala. The castle is surrounded by seven walls made of different metals, and by an enclosure of 14 mountains and seven rivers. The lush description matches that of the utopian "Emerald Isle" of the Hidden Imam in Shi'ite belief. The journey to Kang-Dêz is a spirtual one and like most pilgrimages, including that of Gilgamesh to the East, it involves a spiritual recapitulation.
The cosmic cycle is recreated by the pilgrim as in the walking of the Via Dolorosa or the circumambulation of the Patala Palace in Lhasa. However, this does not mean that Kang-Dêz was not a real geographical reality in the Zoroastrian mind. The description of travel over real localities like Khotan and China suggest strongly that they did envision a geographical location from which the "King of the East" would come.
For the Dragon and Bird Clan, the knowledge (or myth) of a future savior created hope to keep up the struggle. We will see this also in the form of Prester John, the "Christian" king who was expected to save Christendom from Islamic invaders.
Paul Kekai Manansala