I'm having a lot of fun with this game, but I find it frustrating that it seems the enemies are really overpowered. Even on normal difficulty, it really feels like every enemy is way more powerful than my entire party combined They all take tons of hits to go down. For certain ones, like the 4-pack of skeleton spearmen, I practically have to backpedal through the entire level so I can wear them down with hits before they turn to face me. If not for my mage's ice shards spell, I don;t know if I'd ever be able to beat them

I'm currently stuck on a certain room full of spiders on level 3. The spiders just rip me apart. I suppose I could just keep using the back-peddle trick, but that's hard with so many pits I could back into without a minimap. And even if I can get it to work, it still feels cheap. I don;t want to win by simply running away and striking when my enemies are unable to hit me. I want to be able to overpower them in a straight up fight with tactics and skill.

Is everyone having this problem or is it something I'm doing wrong?

I've noticed this is a problem in a lot of old D&D based games. I recently gave up on "Temple of Elemental Evil" because the enemies were just way too hard". This is one issue I would have preferred stayed in the past.

Legend of Grimrock, like Dungeon Master and the Eye of the Beholder series that inspired it, demands a great deal of kite-fighting. Against a single enemy (or squad) you're best served by a backstep-turn pattern that has you and them circling around in a 2x2 square area. Against multiple enemies this becomes rather more frenetic and improvisational, but standing face to face with something and trading blows simply isn't expected to work as a tactic (and the cases where a trap or event pins you facing an enemy are very dangerous for that reason).

If you really want to take the 'stand and fight' approach, playing on Easy difficulty makes it manageable against most things, although you'll still need to dance around with some of the tougher ones.

It helps a lot if your two front-row characters are quite tanky, although there will still be enemies where kiting is the best tactic. My own preferred tactic when I played was to get a couple of hits in with magic and ranged attacks (throwing weapons) while the enemies closed in, then go melee with them for the rest of the fight. One of my front-row characters stacked up on armor while the other had high dodge, so they were able to withstand quite a bit of punishment for the melee portion of most fights. You just have to make sure you don't get flanked, as equipment limitations make it difficult to have more than two tanky characters, and the other two tend to get torn up quickly if enemies start beating on them.

The circle strategy mentioned by Garran is also quite effective for the earlier parts of the game.

On normal difficulty the way you are playing LoG is the way to go, however building an efficient team with a good build will go some way to alleviate the issue, but as Garran has posted, the game is centered around this style of play. You want to be able to 'overpower them in a straight up fight with tactics and skill'? by that I assume you mean stand there toe-to-toe and beat them with brute force? If so try easy difficulty. The only tactics and skill is as has been mentioned is to 'dance' around them and at the same time set up spells and time attacks.

Also you mention Temple of Elemental Evil as having enemies that are too hard. This game is notorious for starting out hard, but you really need a good knowledge of D&D edition 3.5 and tactics using that rule set to survive in the beginning (and a little luck). The irony of your post is that you wish these 'mechanics' would stay in the past, but in the past, games needed knowledge and tactics and skill to win, not like today when most games hold your hand and to win all you need to do is load it up.

I played the Eye of the Beholder games back when they first came out. They were hard, but I don't remember them being so tough that every fight felt like a boss battle.

Who wants to command four sissies who can't take on one or two enemies without backing up the length of a football field? An RPG fight should not feel like a tango or square dance. That's already my strategy, but it doesn't help. When I first got to level 4, it took me nearly 5 minutes of dancing around just to beat two giant mushroom enemies! All that effort against something that an unarmed plummer could kill without breaking a sweat! It was beyond demeaning. You misunderstand me. I like games that require knowledge, tactics, and skill. Simply backing up like crazy and only hitting the enemies when they can't hit you doesn't require any of that. It's a cheap trick that should only be required in extremely desperate situations, not for every single enemy in the game. Not when I outnumber them 4 to 1.

Having all your characters be total wimps is not the proper way to create challenge. The whole point of an RPG is to play a role. Who wants to play a role of a total pansy? Not just mindless brute force, but the proper combination of attacks, equipment, spells, class talents, etc, etc. A proper RPG can still make the fights hard without your whole party a bunch of wimps who literally have to run from every fight.

What skills have you been putting points into? Pumping up each character's weapon/spellcasting school will make them start shredding enemies, especially by the end. Spreading your points out more than that will make things very hard for you, as I found out on my first playthrough.

Evasion is more important than Defense.
Evasion means they fail to hit. Defense merely means you get less damage when they hit.

Try to have a high Evasion rating on your front heroes - it's even possible to have 2 thieves in the front row with high Evasion, and Mages in the back.

Otherwise, strafe-turn-strafe-turn is the key strategy.