Can a thief perform a surprise attack (with dagger) from the back row, or do they need to be in the front?

This was a feature that was introduced in Wizardry 5; thieves and ninjas could hide in the shadows, and then attack from the backrow on their next turn.
In Wizardry 1, it doesn't exist. Thieves can't participate in combat from the backrow in this game.

oops, this is not the wizardry 1 forum

I seem to remember it being possible to hide and then backstab in this game. (That;s unlike, say, Stranger of Sword City where hiding doesn't give you any range bonus.)

Also, this game, unlike Wizardry 1-4, does have ranged weapons.