"It'd be hard to have any ongoing, open hostility, it'd turn the city into a war zone," which is probably not quite what Charles meant, but Steph is thinking of how Gotham turned during No Man's Land, and then during the gang war that tore the city apart (a thought usually accompanied by a wave of guilt).

"It might help that everyone has another enemy to focus on." The militia, and while everyone may not actually consider them the bad guys, they're still enough of a threat to everyone that they kind of count as a shared enemy.