If you have all of your troops loaded to ships and the ships are docked at your castle will they defend the castle during an attack or do they need to be offloaded to the castle?

hmm good question i dont know

The ships need to be in squads to defend/attack, I think.

ships and squads are the same thing in Fantasy2. My question is this.
Will troops loaded to a ship/squad defend the castle if they are docked at the castle?

yes units in ships(in fantasy)/squads(in earth/mars) will defend when you are under attack

Just confirming what Bork said and adding that squads/ships from your alliance docked on your colony will also defend your colony.

-Gaurav

That's good +1 it can come in handy when other people tries to attack.

Well i can't remember how Fantasy servers work since its been some time since i have played in Fantasy servers but in Earth & Mars servers units in the castle will still defend an attack only if it is available and still not in process mode as well as this units in ships/squads will also defend an attack.

Key
Any ...
- Full processed units = Able to defend ANY attacks / attack
- Still in processed mode = Not available to use, unless it is 'hurried' or waited for its processed ticks are fulfilled