As others have pointed out, it is FCR. This is a tremendously difficult battle in FCR, and it causes more than a few players to give up and revert to the vanilla game. You probably should not even attempt it unless you have already played the game on Hard, set up the game with FCR on Easy, and are willing to re-learn most of the combat.
In FCR, you get the "Parry" indication when your attacks are too weak to do any damage. If I've understood the FCR manual correctly (numbers are for FCR Easy level, which is harder than vanilla Hard and all you should attempt the first time out):
The base damage for the Witcher's Steel Sword is 13, but steel has a -10 penalty against monsters = 3.
The damage threshold for Barghests is 5. So base damage alone will not hurt Barghests at all.
The damage bonus for Fast Steel level 1 is +1, so 3 + 1 = 4 is still less than 5, and you still won't do damage.
Even worse, the damage penalty for Group Steel level 1 is -6. So you can't even hit the arse end of a ghoul with it.
Not even Strong Steel will help you enough. Strong Steel level 1 is +2, and Crushing Blow I is +2 for a total of +4.
3 + 4 = 7, which is greater than 5, so you can do about 2 damage per blow to a 53-point Barghest. Lots of luck surviving long enough to kill them all.
The most successful FCR players use Aard and kiting for this quest. There is a ramp across the courtyard from the scene of the attack. The Barghests cannot ascend it all together, so if you take a defensive position on the ramp, you can knock them down and finish them off one at a time.