Melee penalty is a term for shooters' handicap in hand-to-hand combat that causes them to inflict only half of the damage they would do if they were attacking at range. Shooters can not use their ranged attack if an enemy troop is located adjacent to it. They have to either move or engage into hand-to-hand combat.
Several shooters have no melee penalty' as special ability, which allows them to do the same amount of damage as with ranged attack. However, Marksmen and Grand Elves, who have double attack as a special ability, will only attack once in melee combat. Additionally, in Shadow of Death, Bow of the Sharpshooter eliminates melee penalty completely, and allows shooter troops to use their ranged attack even if another troop is located adjacent to it.
Creatures with no melee penalty special ability: