This game is not designed in a way that will let you finish without combat...
If you step back and let the underlings fight for you (or if your main character can't get any damage on your foes) then nobody is going to level.
I have to agree with mystral. One of the pluses of Arcanum is that a pacifist run is perfectly viable; but you have to commit to it from the beginning, and it helps to have played the game through at least once, so as to have at least a rough idea of what you're going to be up against.
(It also helps to RTFM and stop playing the "Lol look at me I'm a n00b" card, but that's a different story.)
As far as XP goes, you do get more for doing your own fighting; but also from completing quests, and you still get a fair percentage from all the damage your followers deal. So unless you stick pretty much exclusively to the main story line, you'll still reach level 50 either way. More importantly, so will your followers, which makes your team pretty much invincible. Especially if you know enough to head to Ashbury early on and grab the "worthless mutt" ASAP.
Note that I haven't actually watched Avellone's video, so I don't know what kind of character he's playing, but Arcanum, with the exception of a few difficulty spikes like the mines, is easy enough to be completable with any kind of character.
I could only stand to watch the first ten minutes; the guy was all clueless talk-talk-talk, and pretty much so was his build. But he freely admitted that he had no idea what the stats did, or even what some of them were; my guess is that someone somewhere told him that a pacifist run was possible, without providing him* with any of "the least you need to know".
*Probably at his own request; note my observation about how much he seems to like playing the n00b card.