Make sure that you're at full health and spell points before entering Manara. Once you've entered immediately make your way to the center of town, entering combat mode as soon as you catch a glimpse of the Dark Wyrms here. There's one on each of the four corners of the stone walkway.
Once you've killed the Dark Wyrms check the ground area this area for a variety of items, including a suit of Mithril Chain Mail and a Divine Restoration Spellshard.
Now make your way towards the northwest corner of town. One of these apartments which has had the front smashed flat contains some Viscous Goos. Kill the goos then check the garden just to the south of the apartment for a variety of potion-making herbs.
Go to the northeast corner of town and enter the building there. Check the chest in the northeast corner of the room for a variety of potions.
Finally, head down to the southeast corner of town. This house is undamaged, and the door is locked, but once you enter you'll have to fight some Ice Puddings.