From the information I had to hand last week, the police acted correctly, if rather over-enthusiastically, to deal with what had the potential to become a major incident.
Had the accusation been true, then yes, this could have been a major incident. But all they had to go on was an unsubstantiated story. Certainly it needed checking, and you can't fault them for that - in checking the rumour, they were acting correctly. They were probably even acting correctly in having plenty of officers available, although even then 250 looks like overkill. But raiding people's houses at 4am is a standard known tactic for inspiring terror in the population being raided, used by all secret police and paramilitary organisations. This was utterly unnecessary. Add failing to identify yourselves as police officers, physically dragging people out into the street such that they're afraid they're about to be murdered, and shooting without provocation - there's no way that's defensible as "acting correctly".
Had anything been found, you would all be singing a different song.
But it wasn't. And it's clear from reports that the chances of there being anything to find were pretty damn minimal in the first place. Certainly it needed checking - maybe the people in there even needed arresting on suspicion of terrorist activity, whilst this was being checked - but was breaking down the door at 4am and shooting without warning the best way to do it? I doubt it, somehow.
If you know you're not doing anything illeagl, then why not co-operate?
Given what reports say about the family and their status in the community, it's quite likely they would have co-operated, had they been given a chance. Had they not been assaulted by armed, unidentified men dressed in black and carrying guns, who smashed down their door at 4am, shot one of them and dragged them all bodily out of the house at gunpoint before they were given any chance at all to co-operate...