The Baby dragon, cute yet with its deadly area splash damage is an epic obstacle in our path to victory. So let me offer you some insight into how I deal with the dragon problem at lower levels.
Explanation and deployment strategy
Your number one defence against the Baby Dragon should be the Musketeer. She is a range and high single target damage troop. She could take the Dragon down from a safe distance quickly.
You can use this card in different ways to deal with the Dragon:
1. Place the card at a distance from the Dragon, this will ensure the card survives to damage the Dragon.
2. Distract the Dragon with a cheap and somewhat high hit point unit and place your Musketeer after, a bit far from the Dragon.
Wait for the Dragon to come into the range of your towers before placing the Musketeer. When placing, place it close to your towers. You do not want to risk losing her and then having your tower being left undefended, it is better to sacrifice some of the tower hit points for a quicker kill.
2. Knight & Spear Goblins
What if you dont have the Musketeer card available to deploy? Well thats when you pull out the Knight & your favourite Spear Goblins. The Knight is a relatively high hit-point card and therefore will soak up damage and serve as a distraction. Spear Goblins do very nice range damage times 3.
If the Dragon is going toward your towers, wait till it gets in range of the towers and put the Knight in front of its face. Then, since the Knight is not an air attacker, he will keep going toward the side of the enemy. This will actually make the Dragon go back. Once the Dragons attention is on the Knight, quickly place the Spear Goblin a bit far yet within their 5.5 range of the Dragon.
Wait for the Baby Dragon to come into the range of your towers before distracting it with your Knight. Place the Spear Goblins closer to the towers to avoid other troops from your enemy trying to kill them. Also, having the Dragon near the tower could serve as an extra precaution in case your Spear Goblins die from Arrows or another enemy card.
3. Goblin & Archer
Alright, lets say youve got no Spear Goblins, Knights or Musketeers. What do you do? Well fear not because Archers and Goblins are here. It might get a little tricky with this one but its completely do-able if you execute this correctly. Its the same concept, you need ranged damage dealers and a way to distract the Dragon.
If the Dragon is moving towards your towers, wait till it gets in range of the them. Then, when it is in reach of the tower defences, quickly put the Goblins on to the corner where the river is on the side with the Dragon. This will make the Dragon turn around. However he will still be in the range of the towers so you can now very quickly put down the Archers opposite to the Goblins. Make sure to put them towards the center of your half of the arena. Damage from the tower and the Archers should bring the Dragon down fairly quickly.
If you have a Knight, it can be replaced with the Goblins. Since the Knight has higher hit-points it will absorb the damage and the Dragon will go down with no issues. This will also eliminate the fact that the Dragon might have accompanying troops that may take down the Goblins. However, the Knight will be able to fend against them as well.
There is also a chance that Archers alone will be a sufficient distraction when coupled with the damage from the towers. I suggest experimenting and finding what works best for you.